Think It Hurts Your Credit? Think Again
Raising a child is no easy feat, mentally and monetarily. It’s been reported that raising a child through 17 years of age can cost over $200,000 compared to $180,000 in the 1960s. Among all the expenses, entertainment has seen a shift as children and teens are more likely to use cell phones and tablets to keep busy.
Allowances are no longer even covering it and jobs amongst the 16 to 19 crowd have remained low since it hit an all-time low in 2009, where only 45 percent of teens were working. It’s no surprise that children are bringing down their parent’s bank account, but could they also be hurting their credit score?
If your teen is in need of funds, you may have added them as an authorized user on your credit card, or you may have signed them up for their own card with the understanding that they pay the bill. If you’ve done either, ask yourself how well have you been tracking their spending or checking that payments are being made? Late payments and high balances could hurt your credit score. You might think your teen is responsible enough for a credit card, but even the slightest misstep could bring your credit score down.
Student loans are often the first big financial step students take. As a parent you may have co-signed their loan, or plan to co-sign a loan in the future. While there usually is no worry until a student graduates as early as age 22, you should still worry. Since you co-signed the loan you might be stuck with the bill if your college grad can’t make the payments; if they forget to make payments it could also impact your credit score. If your student does not show proof of being in school after an extended time period you will have to start making payments whether they graduated or not.
Although the focus has been on teens, younger children are not exception. With a boost in technology use, you’re likely to leave little Timmy playing with your iPhone or tablet. Besides the obvious that they will break the gadget, did you ever think that they will actually run up your tab on it as well? In the U.K one six-year old racked up over $3,000 on his grandfather’s credit card when he purchased credits for a game he was playing. The young boy isn’t the only one; parents share their stories online about how their child racked up hundreds of dollars due to app purchases. Another issue is that your provider may not refund your money even if the purchases were made by mistake.
The Takeaway
Make wise choices when it comes to your children, not only for your future but also for theirs. Helping them with their finances could lead to better practices as they reach adulthood. Teach them how to manage their money and the importance of a good credit score. AmONE can assist you if you’re dealing with neglected student loan or credit car payments due to your teen. Credit repair might be an option, or if you’re in debt a debt consolidation loan might be a good solution. Contact us today to find the right resolution for your financial needs.
