Building (and viewing) teenage credit

FM author Nick and I are approaching near-opposite ends of the greatest journey on earth: parenthood.  Nick announced last weekend that his first child is expected to arrive in January.  I’m looking forward to his posts on how to earn miles while changing diapers.  Meanwhile, my son has just started college and I’m busy earning rewards while paying tuition (see: Double-dipping college rewards).

My son will turn 18 in November.  Once he does, he can start signing up for credit cards.  He’s been responsibly using his own debit card for a few years now (via a Chase high school checking account) and I think he’s ready for the next step.  He understands how important it is to pay his bill in full in order to avoid fees, and he’s interested in earning rewards.

In order to build his credit, over the last few years I’ve added my son to a number of my credit card accounts as an authorized user.  I haven’t actually given him the cards to use, I’ve simply ordered the cards and kept them filed away.  With some Amex cards, I’ve used them myself when I found good Amex Offers available to them.  And, occasionally when he has wanted to buy something online I’ve let him use one of these cards.

How to view under 18 credit info

Many of the tools available for viewing credit scores and reports for free are not available to those under 18.  I stepped through some of the options listed in my post “Complete Guide to FREE Credit Scores, Reports, and Monitoring… for credit card bonus hunting,” and the first few I tried did not work.  Neither AnnualCreditReport.com, Discover Credit Journey, nor CreditKarma allow under 18 year olds to sign up.

Fortunately, one option worked like a charm: Experian CreditWorks Basic via freecreditscore.com.

First note that Experian is not the company that failed to protect our data. That was Equifax (see: Is the Equifax cure worse than the hack? Here’s what I plan to do…).  Hopefully Experian will be more responsible.

Experian CreditWorks Basic is available for free via the website: freecreditscore.com. If you go to that site and aren’t offered a truly free option, try browsing to it via your browser’s private or incognito mode.

The downside to CreditWorks Basic is that they take every opportunity possible to up-sell you to CreditWorks Premium ($4.99 for the first month, then $24.99 per month thereafter).  If you can navigate their interface without accidentally upgrading, the basic version is quite useful on its own.

Current Status

After signing up for Experian CreditWorks Basic, we found that my son already has a nice credit score:

And he has a handful of open accounts (as an authorized user on my and my wife’s accounts):

And he has three closed accounts (due to our closing the primary accounts):

Where is Amex and Barclaycard?

The bizarre thing about my son’s Experian credit report is that his American Express cards and Barclays card are not listed.  Where did they go? We have added him as an authorized user to one Amex business card, 4 Amex personal cards, and at least one Barclaycard personal card.  It makes sense that the Amex business card didn’t get reported as an account.  Even primary Amex business card accounts aren’t reported, but the others are strange.

I believe that the Barclaycard account was added before Barclays started requiring social security numbers.  Usually the credit bureaus are able to match up names and addresses even without SSNs, but that didn’t seem to happen here.

The missing personal Amex cards are more of a mystery.  I’m sure that my son’s SSN was used to obtain them.  I simply don’t know why they’re not there.  Maybe the Amex cards are listed on his Equifax or TransUnion reports?  I don’t know.  But I do know that Amex always pulls from Experian when I open new accounts so it would be especially strange if they didn’t report new AU accounts to Experian.

Building credit before 18 with authorized user cards

Adding a child as an authorized user can help establish and build their credit score, but only if you are responsible with the primary account.  Also, it helps to have old credit, so it makes sense to add your child as an AU when they are young.  And, don’t close the primary accounts.  If you don’t want to pay the annual fee on an old account, you can product change to a no-fee card and stick the card in a drawer (note that you may have to put some spend on the no-fee card every 6 months or so in order to keep the account alive).

Different card issuers have different rules about how old an authorized user must be.  Doctor of Credit lists the minimum age required for each major card issuer. I’ve also updated this list with information from readers:

• American Express: 15+ years of age 13+ (source: Qfcc via comments)
• Bank of America: 18+ years of age?; or maybe no restriction (source: BizzyB via comments)
• Barclaycard: No age minimum
• Capital One: Not aware of minimum (somebody that was 15 got added)
• Chase: No age minimum (doesn’t require SSN)
• Citibank: No age minimum (doesn’t require SSN)
• Discover: No age minimum 15+ (source: Justin and Peter via comments)
• US Bank: No age minimum

As you can see, most do not have an age minimum, so Nick can add his son as soon as he gets a social security number.  Come to think of it, since a few banks do not require SSNs, he may be able to add his son as soon as he and his wife decide upon a name.

Also, note that the Bank of America 18+ requirement must be new since my son had been added to several Bank of America cards in the past.

With most banks, there’s no point in adding your kid as an authorized user (or employee) to your business cards.  This is because most business cards aren’t reported as accounts to the personal credit bureaus.

Authorized user backdating

For older kids, you could identify your oldest credit card accounts and add them as authorized users to those accounts.  Usually banks report the account open date as the date that you requested the authorized user card, but a few report your original account opening date.

The following card issuers are known to back-date authorized user accounts:

• Capital One (source: MyFICO thread)
• Chase (source: MyFICO thread)
• Bank of America (source: MyFICO thread)
• Synchrony (source: MyFICO thread)
• US Bank (source: GLT via comments)

The following issuers do not back date authorized user accounts:

• American Express, as of March 2015 (Doctor of Credit)

I’ll update the above lists as I get more information.  Readers: if you have proof of backdating (or proof against it) for these issuers or others, please let me know!

Next up: Credit card planning

In future posts I’ll discuss my thought process regarding which cards my son should sign up for, how he should prepare for Chase 5/24 rules, how he can meet minimum spend requirements, etc.  Stay tuned!

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