Thoughts on adding kids as authorized users...

[Anonymous]

I added my 15 year old as an authorized user to several of my credit cards.  I am NOT giving her any cards, that would be stupid, but I want these to report to the credit bureau's so when she turns 18 she will have positive lines of credit reporting for her.  I have read differing opinions on whether or not they will actually report or not, but I thought it would be worth a shot.  Opinions?

[Anonymous]

---

@Anonymous wrote:

I added my 15 year old as an authorized user to several of my credit cards.  I am NOT giving her any cards, that would be stupid, but I want these to report to the credit bureau's so when she turns 18 she will have positive lines of credit reporting for her.  I have read differing opinions on whether or not they will actually report or not, but I thought it would be worth a shot.  Opinions?

---

I think it can be good and bad. Good because you are helping her establish something that usually takes many years to do. Bad because she may not appreciate it and could squander her good credit history as soon as she has the chance. I think it really depends on her maturity and level of understanding of credit. You know her best. Do what you think will work for her.

I wish I had had a little leg up on the credit game, but my parents were a credit nightmare and couldn't have helped me even if they wanted to. Seeing them struggle I think made me appreciate credit more. I made my own mistakes in life but have worked hard to fix them and appreciate what I have earned. I think that I will help my son get a good start, as long as he demonstrates the understanding and ability to manage good credit when the time comes.

[Anonymous]

I am thankful my parents taught me the concept of personal finance including the wise use of credit. I think it is a great idea to add her as an AU to get her credit report started; however, I think it is even more important to teach her how credit works and the impact her credit decisions will have on her.

[Anonymous]

IMO, it completely depends on the child. A good friend of mine was added and had her own card at 12 yro, She is 28 now and has a house, a good job, a new car and great credit. Not only did she benefot from the head start, she also benefitted from the education of proper credit responsibility. If you think they are responsible enough, I see no reason not to. Out of curiosity, is it similar to auto insurance where adding them could negativelt impact your CR?

(sorry, I know this doesn't actually answer your question, but the reporting aspect alone is only one benfit of adding them as an AU. My folks NEVER discussed finances and that led me to be irresponsible early on)

[Anonymous]

What is the difference between adding them as an AU now as opposed the day before a childs 18th birthday?

My understanding is only the following dates appear on revolving tradeline:

Last Report date

Open Date

Date of last payment

As long as the account is open, The "last report date" would always be current ?

Wouldn't the trade line "open date" would be the same regardless if the AU is added at 15 or 17.999?

"Date of last payment" would be just what it is?

Please advise

[Anonymous]

I was an authorized user on a card for a few years. Every payment on that account shows up on my credit report. So I basically got credit for three years of good payment history, without actual responsibility for the card (I did make most of the payments, because I was doing most of the charging).

The primary cardholder ended up declaring bankruptcy at a time several thousand dollars were remaining on the balance (but no payments were past due). The account shows up on my credit report as a positive tradeline. Closed by credit grantor, but paid as agreed for three years. 

[Anonymous]

---

@Anonymous wrote:

I was an authorized user on a card for a few years. Every payment on that account shows up on my credit report. So I basically got credit for three years of good payment history, without actual responsibility for the card (I did make most of the payments, because I was doing most of the charging).

---

[Anonymous]

Last year I added a friend on a card i have had for 11+ years.

The tradeline on her credit report shows the open date as 2005, as well as every payment I have made in the last 4 years.

So I'm curious if the result is the same for everyone: the AU tradeline history mimics that of the account owner, irregardless of when the AU was added.

[Anonymous]

My daughters is pretty mature for her age and I have regular discussions with my 15 and 11 year old about credit and finances.  They both have a baby sitting job where the older makes 60 a month and the the youngest makes 20.  I encourage them to save and spend responsibly and stop them if they are spending it out of control.  I really want them to have a better grasp of money than I did when I got my first full time job at 16.  I started seeing money and it was burning a hole in my pocket.  I got a credit card at 18 with a $2500 limit and maxed it out in a few months taking all my friends to dinner and IGNORANT stuff.  Well, that ruined my credit because I couldn't even afford the minimum payment on it.  It was a hard lesson learned that I don't want my kids to go through.  I hope I do everything I can to prepare them for fiscal responsibility by starting them out with a good credit score with the hopes they never fumble the ball on it.  I do not co-sign for any reason simply due to the fact I worked to hard for my credit score and so I have told them I won't co-sign for them in the future.  They have a childrens understanding of credit but I hope I have beat it into their heads enough I don't have to worry about them in the future ruining their credit.

[bch238]

I don't agree with the premise of the original post.

Adding a 15 y.o. as an AU--but withholding the cards--teaches the 15 y.o. absolutely nothing about money management.  Intead, all you are doing is artifically padding the kid's score, which will make more credit available to them when they are old enough to apply for their own cards.  Having learned nothing in the three years prior, said kid is more likely to do stupid stuff with credit that really ought not be so readily available to them.

On the other hand, my 15 y.o. daughter has been an AU on my CSP for a year.  She uses it sparingly and never without permission.  More frequently she uses her Amex Serve (she got it two years ago, and I use it to pay her allowance).  She has become very conscious of her spending.  It isn't stupid.  It's smart.  I think every parent needs to teach their kids this stuff.