Setting the Groundwork to Build Your Child’s Credit History

As you prepare your child for the future, it’s important to include their finances in the equation. Raising financially savvy children is an important part of the bigger picture, and one of the best ways you can set them up for success is by building their credit. While there is no one “right age” to start, it’s helpful if your child is old enough to grasp financial concepts so they can learn as they grow.

The Hidden Cost of “Waiting Until They’re Older”

Credit isn’t just about borrowing money; it’s about proving you can be trusted with responsibility. Landlords check it. Employers may review it. And when your child eventually moves out into an apartment or looks to buy a car or house, banks and lenders use it to decide loan rates.

If your teen heads into adulthood with no credit history or bad financial habits, they could:

• Get stuck with sky-high interest rates on loans
• Struggle to qualify for their first apartment lease
• Miss out on financial opportunities simply because they weren’t prepared

In fact, a WSFS Money Trends survey found that nearly three-quarters of surveyed adults wished they had received financial education earlier in life.

How to Get Started

Building sound financial habits with your child is simple, and WSFS’ Greenlight partnership, a debit card and app which offers money management tools, makes it even easier.

• Open an account together. A savings account is a great way to understand putting money aside. While many require a minimum balance, WSFS Core Savings accounts waive minimum deposit and balance requirements for anyone under eighteen years old.
• Set up a debit card. Teaching children the difference between credit and debit is important but putting it into practice reinforces the message. With Greenlight, you can track your child’s spending and put limits on transactions.
• Give them hands-on practice. Whether it’s covering gas money, managing allowance, or budgeting for a school trip, real-world experience is the best teacher.

Creating a Credit History

For most people, your child won’t have a credit report unless you’ve actively been working to develop it. However, the Consumer Financial Protection Bureau recommends you contact TransUnion, Equifax, and Experian to see if there is a report as it can be a sign of fraudulent activity. To request a report, you will need:

• A copy of your child’s birth certificate
• A copy of your child’s Social Security card
• A copy of your driver’s license or government identification that includes your current address
• Proof of your address such as a bill or insurance statement

This activity is a good opportunity to talk to them about credit scores and explain how debt works. But you’re not alone in helping them understand the process. Through a free WSFS account, your children can access tools like Greenlight Level Up, a gamified financial literacy educational experience.

An easy way to begin contributing to that report is by adding your child as an authorized user on your credit card. If you are in good standing and are making payments on time, this can help build their score. Make sure to check your card’s terms and conditions as some won’t show on a credit report.

You can also co-sign a loan for a used car or student loans when they are older, but you must be certain your child will pay off the debt. Otherwise, you will be responsible for the debt, and your credit score could suffer.

Building a Stronger Foundation

Credit is not something that can be built overnight. It takes time, practice, and responsible financial habits. The years at home are the perfect time to build a strong foundation. Ignore credit now, and your children may pay the price later. Start early, and you’ll give them the freedom and confidence to take on life’s milestones without financial roadblocks. Schedule an appointment with one of our Associates to discuss ways to take control of you and your children’s financial future.