Helping Your Teenager Establish Credit as Authorized User

[antredd67]

  Some of the posts that I have been reading stated that if you are added as an authorized user on someone's account with long and excellent credit history, this will significantly help raise your fico score.

   So (me trying to be smart) this same strategy should work for those of us who have teenagers and we want to help them establish their credit.  By adding my 16 y/o teen to one of my oldest credit cards as an authorized user, this will help him build his credit rating piggy backing on me. 

   Is it possible that, if I do that, my son can have a 700+ Fico score by the time he reaches 21? I'm looking at the fact that he will have the long history of being an authorized user on my card keeping the DTI on that card below 30%. Plus he will have at least 2 years of credit established in his name as he purchases his first used car at 18 or 19 in his name (satisfying the installment type of credit), and perhaps applying for and getting a charge card like AMEX in his name.  What do you all think?

[Anonymous]

Antredd67,

I can tell you this, I add my 13 yr old to a couple of cards as AU.  (Its no longer cool to have mom holding your hand in the mall).  I recently opted him out of pre-approved offers because not only does he get offes from the likes of Chase (which I don't get myself) but he has been getting offers for AMex  Not just the old vanilla green but the Blue Cash and Gold rewards. I don't get offers for any ofthose cards so I'm gonna assume that beign AU is a good thing.

On the other hand I figured I'd better give him some life lessons in credit.  With those offers when he finally does apply for credit, without the knowledge to manage it, I would be giving him just enough rope to hang himself.

[Anonymous]

I would suggest Teen Visa Buxx Card (pre-paid) you load the card and there is no over the limit fee and it actually teaches kids on how to use the credit card. You are able to view all activity on line and they are not allowed to buy from certain retailers where adult content is sold. I don't remember the fees but so far it has worked excellent...only thing you have to load from the internet. Wachovia bank sponsors the card. I gave it to my 13 year old as a gift for Christmas and so far I haven't had a problem.

[Anonymous]

My son also has the Visa Buxx pre-paid card through which he receives his allowance.  The prepaid  card will not help establish credit as the OP spoke of.  Since he uses the card for school shopping which can be several hundred dollars, and dosn't want to be seen with mom, he is also an AU on two of my credit cards.