From helping them understand small chores to life’s everyday challenges like paying bills, the financial knowledge you share can help your children get the upper hand when it comes to building credit. Continue reading for some suggestions on how you can assist your adolescent on their journey to build credit.
Teach your teens the basics
Start with the “whys” of building credit and give your teen a breakdown of why it’s important to build good credit history. Discussion topics can include:
● The possible advantages of having a good credit score for anything from obtaining a phone plan to receiving credit card approval.
● The significance of responsible credit usage.
● The distinctions between debit and credit cards.
Start with a credit report check
To check your child’s credit and report any inaccuracies, get in touch with Equifax, Experian, and TransUnion, the three major credit agencies. And after they turn 14, make it a habit and have your teen examine their own information.
Hughes makes checking your credit score easy. With Hughes’ new online tool, CreditSmart, members get access to their credit reports and scores via Digital Banking. CreditSmart’s reporting feature provides the same robust information you would find on your credit report while helping you to understand the key factors that impact your score and overall financial health.
Open their own checking and savings account
Help your teen manage their own finances by getting them started with building short-term savings in a savings account and keeping their spending money in a checking account. Your teens may learn management skills that they can use when using a credit card by using and managing both accounts.
Hughes offers both Youth Checking and Savings account. The Hughes Youth Checking comes equipped with a free Visa Debit Card, free unlimited bill pay, no monthly fee, no minimum balance, overdraft protection and more. Get started with a Youth Savings account and get competitive savings rates to help your teen with their savings goals.
Make your teen an authorized user
By designating your teen as an authorized user on your credit cards, you may be able to help them establish credit before they turn 18. When used responsibly, your kid may be able to develop and improve their credit history while also benefiting you. But it’s important to remember that negative behaviors like late payments could be detrimental to both of you.
Talk about why good credit is important
When teenagers are unable to open their own accounts, credit can appear confusing to them. However, if you can emphasize the value of credit to your teen’s specific aspirations, it might be helpful. Maybe your adolescent wants to buy a new car. You can do this by describing how having good credit allows you to get a car loan.
Need help getting the young adult in your life started on their financial journey? We can help take you further. Visit HughesFCU.org and explore your options today.