3 easy financial tips for parents
Yahoo Finance recently reported that a quarter of millennials surveyed do not feel prepared for financial adulthood. That’s pretty scary given how many of them are now cranking out kids of their own!
We know that the credit score is an increasingly important contributor to an individual’s long term financial success.The credit score determines whether you can qualify for loans critical to building wealth such as mortgages and student loans, and how much interest you’ll have to pay.
We at Credit Parent put together a few tips parents with young children can use to set their children up for a good start to their financial adulthood.
- Open a child savings account: Open a joint savings account with your child as the primary account holder. One factor that goes into the credit score is the age of your oldest financial account. Having a savings account opened when you are born gives your child’s credit file an 18 year head start on financial adulthood! Many banks make savings accounts for children free and it can all be done online. Here's a link to some good options. Our favorite is the account from Alliant because of it's super high interest rate.
- Add your child to a credit card.Pick a credit card that you pay off every month and add your child as an authorized user. Having a credit card in your child’s name will allow their file to begin getting populated with credit transactions, which will start to build up their credit history from an early age. By the time they actually need credit, they’ll already have a good long term credit history, which creates a huge head start. This can usually be done using the your card issuer's online account portal.
- Freeze your child's credit. Once you've done the basics of opening an account and getting their name on a credit card, go ahead and freeze your kids' credit. This will prevent any other accounts from being opened in their name. You can remove the freeze later when your child needs to establish new financial accounts, but for now, this step will protect them from thieves and ensure there's only good stuff going onto their credit file.
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