# Establishing Credit at a Young Age: Set Your Kids up Right

An episode of [Earn Your Leisure](https://invisiblenetwork.ai/podcast/1450211392), 18 Aug 2026, 20 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/8dbc4f54-a337-4481-9ef2-b355012b0a3d/9150b598-0ba4-41aa-aed4-b4a700ccdbde/audio.mp3?utm_source=Podcast&in_playlist=eac4c628-29cb-469a-b5c8-b355012b0a48

In this episode, Troy Millings speaks with credit expert Shonda Martin to discuss the crucial topic of establishing credit at a young age. Shonda stresses the importance of setting children up for financial success by adding them as authorized users on credit cards at 16 or 17 years old, ensuring they have an established credit profile by the time they turn 18. She emphasizes that simply turning 18 does not automatically grant a FICO score and outlines the necessary credit history requirements for it. Shonda also delves into the misconception regarding the impact of adding children to credit cards at a younger age, emphasizing the potential risks and benefits of such actions. She shares personal experiences and offers valuable insights into the long-term effects of credit history, emphasizing the value of a well-managed credit profile over a high credit score. Additionally, Shonda provides practical advice on handling credit card closures, shedding light on how such actions can affect one's credit score and offering guidance on when it's appropriate to close a card. The discussion also covers the significance of credit card age and how it contributes to a solid credit foundation, highlighting the benefits of maintaining open accounts and managing credit utilization. Shonda's expert advice on navigating the nuances of credit scoring provides invaluable knowledge for individuals seeking to build and maintain a healthy credit profile. Don't miss this insightful conversation that explores the complexities of credit establishment and management, providing practical strategies for optimizing financial well-being. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: There's the importance of having credit at a young age.
[0:02] Speaker 1: Like you said, one of those factors is the credit
[0:05] Speaker 1: is right. And so if we're getting credit at twenty
[0:08] Speaker 1: twenty three years old, we've missed some years that we
[0:10] Speaker 1: actually could have. So talk about the importance of establishing
[0:13] Speaker 1: credit at a younger age, maybe talk about authorized users
[0:16] Speaker 1: and things like that.
[0:16] Speaker 2: Yeah.
[0:17] Speaker 3: Absolutely, So for the parents out there, I recommend every
[0:21] Speaker 3: parent if you can, if you have a credit card
[0:24] Speaker 3: that you know you're not going to pay later or whatever,
[0:26] Speaker 3: with good history, I recommend to add your child at
[0:30] Speaker 3: no later than seventeen. Now, if your child is eighteen,
[0:33] Speaker 3: obviously you can add them, but adding your child from
[0:36] Speaker 3: the ages of sixteen through seventeen will set them up
[0:40] Speaker 3: for when they turn eighteen, they'll already have an established
[0:43] Speaker 3: credit profile. Most people don't realize that you do not
[0:46] Speaker 3: have a FYCO score just because you turned eighteen. You
[0:49] Speaker 3: have to have six months of credit history with at
[0:51] Speaker 3: least two accounts before FICO will issue you a credit score. Right,
[0:56] Speaker 3: So as opposed to just starting at eighteen and building
[0:59] Speaker 3: your own credit. If if you have a parent, a
[1:01] Speaker 3: responsible parent, that will put you on their credit card
[1:04] Speaker 3: prior at least six months prior to your eighteenth birthday,
[1:07] Speaker 3: you'll already start off, you know, a little ahead of
[1:09] Speaker 3: the pack, right. So, as opposed to getting those entry
[1:11] Speaker 3: level credit cards, sometimes you can get quality offers because
[1:15] Speaker 3: it's really easy to get a seven hundred credit score,
[1:17] Speaker 3: especially if you have no collections or you haven't messed
[1:19] Speaker 3: up your credit yet. It is super easy to get
[1:21] Speaker 3: seven hundred. So adding, if you have the opportunity to
[1:26] Speaker 3: be an authorized user on a family member's card, and
[1:30] Speaker 3: if you share an address with them, it's better because
[1:32] Speaker 3: nowadays the anti abuse laws effects out effects trade lines
[1:37] Speaker 3: authorized users, and so if you have the same address
[1:40] Speaker 3: or the same last name, you'll be more credited for
[1:42] Speaker 3: those accounts, right or for the yeah, for the authorized
[1:45] Speaker 3: user accounts setting once you turn eighteen though, because this
[1:49] Speaker 3: is the mistake a lot of parents make, they'll put
[1:52] Speaker 3: their child on their credit card at like fifteen, sixteen, whatever,
[1:55] Speaker 3: and then whenever they turn eighteen, the child will have
[1:57] Speaker 3: like a seven hundred credit score.
[1:59] Speaker 2: And as opposed to making.
[2:02] Speaker 3: The child or having the child apply for their own accounts,
[2:05] Speaker 3: they just kind of lean on lian on mom's card
[2:09] Speaker 3: or mom's credit history and think that it's going to
[2:12] Speaker 3: take them far.
[2:13] Speaker 2: And that's where they run.
[2:14] Speaker 3: Into the situation of having a high credit score but
[2:16] Speaker 3: not a lot of credit, not a worthy credit credit
[2:19] Speaker 3: borrow wing. Right, So you need to make sure that
[2:23] Speaker 3: when that child turns, it turns eighteen. Like on my
[2:26] Speaker 3: children on their eighteenth birthday, we're going to be applying
[2:28] Speaker 3: for a credit card on their eighteen birthday because the earlier,
[2:31] Speaker 3: the earlier, the better. Apply for a credit card. Please
[2:35] Speaker 3: apply for a credit card before a student loan. That's
[2:37] Speaker 3: just like a side note, that's one of the things
[2:40] Speaker 3: that's one of the mistakes that I wish that I
[2:42] Speaker 3: can catch with a lot of people. Having a credit
[2:45] Speaker 3: card be your first established account, your credit age is
[2:48] Speaker 3: going to be reliant on that account.
[2:51] Speaker 2: The great thing about credit cards is they can be
[2:52] Speaker 2: open forever.
[2:53] Speaker 3: Like there is no end date to a credit card
[2:56] Speaker 3: unless you choose to close the card or the bank
[2:58] Speaker 3: chooses to close the card. Whereas a loan, every loan
[3:01] Speaker 3: has a term date. Every loan will end eventually. So
[3:05] Speaker 3: when your credit age is based on a loan, once
[3:08] Speaker 3: that once that account closes, yeah, your credit is going
[3:12] Speaker 3: to be affected drastically. Right. So if you have your
[3:14] Speaker 3: first established account as a credit card. That's sort of
[3:16] Speaker 3: like a safety blanket for your credit age. And so
[3:20] Speaker 3: make sure at eighteen apply for a card. It can
[3:22] Speaker 3: be it can be a secure card, it can be
[3:24] Speaker 3: a subprime card. Whatever. Apply for a credit card and
[3:27] Speaker 3: then start to build your own credit history because authorized
[3:30] Speaker 3: users can only take you so far, and not very far.
[3:32] Speaker 2: Nowadays, it's a quick fill up.
[3:34] Speaker 1: Because you did bring up closing cards, and I know
[3:36] Speaker 1: a lot of people as they're trying to fix their
[3:37] Speaker 1: credit like, all right, well I pick it off, let
[3:39] Speaker 1: me close it. Talk about how that could negatively affect.
[3:44] Speaker 2: Yeah, it could.
[3:46] Speaker 3: My rule of thumb when it comes to closing credit
[3:48] Speaker 3: cards is if you have if the credit card has
[3:50] Speaker 3: an annual fee and you're not getting any increases and
[3:54] Speaker 3: the it's just not worth it to keep it. There
[3:57] Speaker 3: will be there will come a time where you'll probably
[3:59] Speaker 3: want to owse that card. When you close that card
[4:02] Speaker 3: is super important.
[4:02] Speaker 2: Number one.
[4:03] Speaker 3: If you are applying for anything, any large purchase like
[4:07] Speaker 3: a car or home within the next six months, it's
[4:09] Speaker 3: not the time to close that card.
[4:10] Speaker 2: Close it. After you get your car, your home, whatever.
[4:14] Speaker 3: The only time I would suggest you closing the credit
[4:16] Speaker 3: card is if you if you know, like I said,
[4:18] Speaker 3: six months free of any applications, and also make sure
[4:22] Speaker 3: that you have another card before you close that card,
[4:26] Speaker 3: like do not like I see people all the time
[4:28] Speaker 3: like I just hate this card, I want to close it,
[4:30] Speaker 3: et cetera. And it's just like that's going to do
[4:32] Speaker 3: more harm than good. I have a two hundred dollars
[4:34] Speaker 3: Capital one card that I've had since college. That card
[4:37] Speaker 3: is still open. I haven't gotten an increase in years.
[4:39] Speaker 3: I don't even care to use the card. I keep
[4:41] Speaker 3: it open.
[4:41] Speaker 2: Specifically because credit age.
[4:44] Speaker 3: An aged credit card is the most beneficial thing that
[4:47] Speaker 3: you can have on your credit report, that like the
[4:50] Speaker 3: most and it's one of those things that's like the
[4:52] Speaker 3: gift that never never stops giving. Because every single three
[4:55] Speaker 3: to six months that a car ages, it's going to
[4:58] Speaker 3: add more to your credit ad and also your FICO points.
[5:01] Speaker 3: So keep that in mind. So don't close a card
[5:04] Speaker 3: unless you have to. If you if you have a
[5:07] Speaker 3: card that you don't use, put a subscription on it.
[5:09] Speaker 3: I have Netflix, like use one, use pick one of
[5:13] Speaker 3: your subscriptions that you probably have coming out of your
[5:15] Speaker 3: bank account. Assign those to each of you know, each
[5:18] Speaker 3: of your credit cards so that it can have usage,
[5:20] Speaker 3: so the bank will not close it due to non usage.
[5:24] Speaker 2: So what about putting your child on the credit card? Yes,
[5:27] Speaker 2: as a child, Yeah, for I.
[5:29] Speaker 3: So one of the things that people think that makes
[5:33] Speaker 3: some difference is if they add their child at like
[5:34] Speaker 3: twelve or thirteen. That doesn't make it regardless if you
[5:38] Speaker 3: add your child at twelve or if you add them
[5:39] Speaker 3: at seventeen, it will not make a difference in terms
[5:42] Speaker 3: of the effect that it will have on their credit reports.
[5:45] Speaker 2: That's a misconception.
[5:46] Speaker 3: However, me personally, I would suggest, like I said, adding
[5:50] Speaker 3: your child at like seventeen when you when someone asks
[5:53] Speaker 3: their child at thirteen, to me, it just that's a
[5:55] Speaker 3: that's that's what seven years, seven eight years until they
[5:59] Speaker 3: turn eight eighteen, and that's a lot of room. It
[6:02] Speaker 3: leaves a lot of room open for a mistake. What
[6:03] Speaker 3: happens if you get a lay payment on that card
[6:05] Speaker 3: and now your child's credit will be affected before they
[6:08] Speaker 3: can even establish credit. So we never know what can happen, right,
[6:12] Speaker 3: So I just for I just recommend, like I'll personally,
[6:16] Speaker 3: I'm adding my children at when day turn seventeen. As
[6:19] Speaker 3: long as you have six months before they turn eighteen,
[6:21] Speaker 3: they're fine.
[6:22] Speaker 1: I was a beneficiary of that, so I was added
[6:26] Speaker 1: to my mom's I told the story before, but I
[6:28] Speaker 1: was added to my mom's American Express card at six seventeen.
[6:32] Speaker 1: And so now even when I get the cards, it'll
[6:34] Speaker 1: say member since eighty five, even though I was born
[6:36] Speaker 1: in eighty two. But my credit history goes back that far,
[6:39] Speaker 1: so it's over thirty seven years. So every time I
[6:42] Speaker 1: get a new card, it gets averaged into that. Yeah,
[6:45] Speaker 1: so I think.
[6:45] Speaker 2: When iutang that's a blessing, it was.
[6:47] Speaker 1: A blessing, and that it's still a blessing. Actually I
[6:49] Speaker 1: still have the card because I just want that history
[6:52] Speaker 1: because sure that thirty seven years plus a one they average,
[6:55] Speaker 1: it makes it like sixteen years of credit age. So
[6:58] Speaker 1: I'm like that works perfectly.
[7:00] Speaker 3: In American Express is a huge relation bank, like indeed,
[7:03] Speaker 3: man having a long standard relationship with them, you can
[7:06] Speaker 3: get anything.
[7:07] Speaker 2: This is true.
[7:08] Speaker 1: But we talked about the number seven hundred and it's
[7:11] Speaker 1: key and I don't want people to you know, some
[7:13] Speaker 1: people may not have seven hundred, but it feels like
[7:15] Speaker 1: that's the goal. But there are people like, what are
[7:19] Speaker 1: the numbers that in the range that people should be
[7:21] Speaker 1: trying to get to seven hundred seven fifty. I know
[7:24] Speaker 1: we got some eight fifties out there.
[7:26] Speaker 3: Yeah, So I'm a little different when it comes to
[7:29] Speaker 3: credit scores, right, because I know the scoring model and
[7:31] Speaker 3: how much your credit profile matters. Most people don't believe
[7:37] Speaker 3: me when I say I had over one hundred thousand
[7:39] Speaker 3: dollars in credit card limits before my score was seven hundred, right,
[7:42] Speaker 3: and it was simply because I learned how to set
[7:45] Speaker 3: up my credit profile that will that far past my
[7:49] Speaker 3: credit score. There's a lot of time there's a lot
[7:51] Speaker 3: of people who have over seven hundred and still can't
[7:53] Speaker 3: get approved for over ten thousand dollars twenty thousand dollars
[7:56] Speaker 3: right because their borring power does not match their score.
[7:59] Speaker 3: So I don't ever recommend a specific score. What I
[8:04] Speaker 3: will say is, like I always say, a healthy profile
[8:06] Speaker 3: will translate if people need to focus on their credit
[8:10] Speaker 3: profile more meaning making sure you don't have any lay payments.
[8:13] Speaker 3: If you do have lay payments, try to rectify those.
[8:17] Speaker 3: If you have collections, try to try to rectify all
[8:20] Speaker 3: of your credit issues.
[8:22] Speaker 2: Make sure that you have at least.
[8:24] Speaker 3: Four accounts open at all times, like after you begin
[8:28] Speaker 3: to build credit. There should never be a time where
[8:29] Speaker 3: your credit profile goes below three open account or goes
[8:33] Speaker 3: below four open accounts any time. Regardless, you can have
[8:36] Speaker 3: an eight hundred credit score. If you do not have
[8:38] Speaker 3: at least four accounts open, any application that you do,
[8:42] Speaker 3: you're going to get what's called an empty profile penalty, right,
[8:47] Speaker 3: And we don't see this as consumers. We can't see
[8:49] Speaker 3: this on our credit score or our credit report. However,
[8:52] Speaker 3: when it comes to lenders and how our credit reports
[8:55] Speaker 3: are are assigned and how they translate over to their system,
[9:01] Speaker 3: if you have less than three accounts open, four accounts open,
[9:04] Speaker 3: then regardless of your score, you automatically panalize. You're automatically
[9:07] Speaker 3: moved down to a lower tier of borrowing power, multiple
[9:12] Speaker 3: tiers rather. So that's going to be more important making
[9:15] Speaker 3: sure you're not applying for a let's just say an
[9:20] Speaker 3: American Express card if you have just opened up two
[9:24] Speaker 3: other credit cards in the last six months.
[9:26] Speaker 2: Right, So those are the things that speaks more to
[9:28] Speaker 2: like your approval.
[9:29] Speaker 3: Now, when it comes to score, if I had to say,
[9:31] Speaker 3: I would say six eighty and above, you pretty much
[9:35] Speaker 3: with a healthy profile you pretty much can get anything.
[9:39] Speaker 2: Six eighty and it's super.
[9:41] Speaker 3: And the thing is, it's so And I know this
[9:42] Speaker 3: probably sounds far fetched to a lot of.
[9:45] Speaker 2: People, but it's so easy to get a six eighty.
[9:47] Speaker 3: Like I actually tell people, if you don't have at
[9:49] Speaker 3: least a six fifty, then usually one or one of
[9:52] Speaker 3: three things are the case. You had a recent collection
[9:55] Speaker 3: within eighteen months, a recent aid payment within twenty four months,
[9:59] Speaker 3: or you have high youation. Because as long as you
[10:01] Speaker 3: don't have those, you at least you should at least
[10:03] Speaker 3: have a six fifty, just in terms of how your
[10:05] Speaker 3: credit scores, how our credit scores are allotted

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