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5 Ways To Build Your Child’s Credit History

There’s a lot of things that parents can teach their children, but some of the most valuable life lessons are the most practical. As a parent, you want to raise financially-aware and responsible children who are prepared to make big money decisions by the time they reach independence.

The pandemic has taught us to be financially sound so that we could get through every economic challenge that comes our way. We would want our kids to grow up as strong and resilient individuals who can emerge amidst trials victorious. One of the ways by which you can offer them a huge head start is to help them build a credit history.

What is credit history?

Credit history is a person’s record of all his financial transactions which reflects his ability and responsibility in paying debts. Good credit history can pave the way to earning lenders’ trust and utilizing a wide range of banking products. On the other hand, credit history with delinquencies missed payments and unsettled debts can prevent someone from getting approved for a financial facility.


The benefits of starting young

Many forms of convenience come at the cost of credit. For instance, even if you have a high-paying job, you can’t open a phone line without a credit card. To a certain degree, owning a non-supplementary credit card is a sign of independence and financial capacity–something you may want your child to have by the time they turn 18 or 21.

It’s also a no-brainer that ingraining all the financial know-how from a young age will help develop a positive relationship with money. Managing money wisely is a skill one cannot solely learn from school. Good money habits may take years of experience to master and starting at a young age can train up a child in understanding the complexities of financial management.

The articleAn Age-By-Age Guide To Teaching Children About Moneydiscusses which aspects of money management can be taught to children depending on their age. From 5 years old to 20 years old, children should have learned about patience, decision-making, money growth, and financial responsibility.

Building your child’s credit history

Teaching kids how to handle their money is the first step to building a sound credit profile. As they grow, here are a few things you can do to help them establish their financial credibility.

1. Forge a good relationship with the bank

Having bank accounts connected to their names is a great way to help them build a relationship with a bank as early as possible. Once they’re old enough to personally receive money from relatives, you can also, encourage them to decide to put the money in their savings account themselves.

bank officer

Banks, such as BDO, offer kiddie savings accounts that you can open for kids as young as infants. Equicom Kiddie Builders Savings Account is available with an initial deposit of Php500 while Security Bank’s Junior One Account can start with an opening balance of Php100.

2. Stimulate saving goals

There are plenty of savings challenges that you can do with your kids to help them realize how long-term discipline can merit favorable results. For example, you can encourage them to save all their P10 or P20 bills to fund a trip to Disneyland or to any local tourist destination where you all can unwind as a family. The concept of savings can start from 7 years old until the child reached the age of 15. At this stage, you can introduce the concept of money growth in many different ways – saving and earning interest, investing, and getting into a small business to earn a profit.

READ:6 Smart Money Moves During and After the Quarantine Period

The act of choosing to put money for bigger benefits in the future is a great way to stimulate real-life choices, such as deciding to spend your salary now orsaving for a carin the future.

3. Inculcate self-control and discipline

The internet has made it easier for anyone to make money transfers from their bank to their e-wallets. Instantly, one can fund their Shopee or Lazada wallets without the parent’s consent. Teach children that these transactions should be handled consciously as the funds in their accounts may drain instantly.


Self-control is important in making wise-money decisions. Money spent on unplanned purchases is money wasted. While debit and credit cards are entirely different, debit habits often carry over to credit, so you can use a debit card as a training tool.

4. Build credit through supplementary ownership

Banks allow children as young as 13 to be supplementary credit cardholders. The credit behavior behind those cards reflect you and your child’s, so you can take advantage of it by getting supplementary cards under your child’s name, but let them use them for household purchases. You can hold onto the card and have them swipe it whenever you shop together. That way, their account gets exposure to credit without giving them full reign over a credit card.

mother and daughter

5. Make your child an authorized user

If you can keep your credit card hidden from your kids, consider adding them as authorized users of your credit card. It follows the same concept as supplementary cards, but only your primary credit card is involved. Your transactions will reflect on their credit histories, which allows them to build a credit profile. Of course, you should only do this if you’re sure not to have any delinquencies that could be detrimental to your child’s future credit.

Bear in mind

Financial health can contribute much to your child’s quality of life. Their money habits can define the way they handle their other responsibilities as they grow old. Be one of those proud parents who raised a child with a sense of responsibility and maturity when it comes to handling money.

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