To cap off this week’s emails on personal finance and security, I want to touch on a topic commonly overlooked but still impactful on your retirement: your children’s credit.

This topic is important because it could tell you if your dependents will still depend on you in your retirement or not. That’s because this question extends beyond direct support to include things like assistance in obtaining lines of credit.

If your child does not have a credit history when they apply for a loan, they may be required to find a cosigner, and most of the time, that cosigner is a parent. While every parent trusts that their child will meet the terms of the loan, being a cosigner still places liability on you.

That’s why I advise my clients to establish their children’s credit as early as possible. And, you can do it without something drastic like taking out an expensive personal loan in your child’s name.

You can do it simply by making your child an authorized user on one of your credit cards. You don’t even have to give them access to it!

By making them an authorized user, your child benefits from the payments you make on the account, helping them build their credit before they even need it. You then benefit from your child being more financially independent when they become an adult.

Now, I understand the topic of credit can be personal, and questions abound. Call my office at 513-563-PLAN (7526) or book online here and schedule an appointment. We would be more than happy to sit down and discuss how best to begin establishing your child’s credit.

Nikki Earley, CFP®