How We Gave Our Kids a 700+ Credit Score Before Age 18

0:00 Esther In the last five years, Gen Z credit card balances have grown by over 200%. When our oldest turns 18, he'll have over three years of credit history, a credit score in the 700s, and he won't have opened a single credit card himself. Musketz graduate high school would zero credit history, zero, and then they wonder why they can't get any apartment, why they need a cosignor, or why they're starting from scratch. Our kids aren't starting from scratch, they're starting from here. Today, we're showing you exactly how we did it. Welcome back to the Broke's Table, Legacy at the Table. If you've been falling along, you know we're not just talking theory, we're showing you exactly what we do in our family. Today's episode might be the most tactical one yet. We're pulling back the curtain on something most parents don't even know is possible. By the end of this episode, you'll understand exactly how the authorized user strategy works, when to start, which cards to use, and how to track your child's credit legally and ethically. This isn't a hack, this isn't a loophole, this is how the system actually works, and how wealthy families have been using it for generations. We are just making sure that everyone knows about it. Let's start with the basics. An authorized user is someone who's added to an existing account. They get a card with their name on it, but they're not responsible for the bill. The primary cardholder is... Here's the magic. Most credit card companies report authorized user accounts to credit bureaus. That means the card's entire history, years of on-time payments, gets added to the authorized user's credit report. So, if I add my teenager to a card, I've had for 10 years with perfect payment. My teenager inherits that history on their credit report. Think about what happens when most kids turn 18, they have no credit history. To build credit, they need to get a credit card, but to get a credit card, they need credit history. Classic catch 22. The authorized user strategy breaks that cycle. By the time our kids are 18, they already have years of credit history. Then they can qualify for apartments, car loans, even good credit cards on their own merit. Isn't this gaming the system? No, this is the system. The system doesn't care about you and me and the kids. The system doesn't have values. The system doesn't have favorites. The system just has features, and those who understand the features of the system become the winners. So, I feel like this strategy is one that is often overlooked, but it is a winning strategy. But again, people win when they know the system and they play it responsibly. So, this strategy isn't going to work if you're bad with your credit card or if you miss payments. One thing that also comes to mind is the fact that you are simply paying attention. You're paying attention to what's out there and how you can use it to benefit you. And you've found a system that actually helps you increase your children's future benefits, not just yours, but using what you have now to make sure that you're setting them up so they can succeed. And I think ultimately as a parent, that's what we want to do. We want to see our children be successful in whatever it is that they want to do. So, if you have ways to help them, which is what we're doing, we're hoping that by teaching them, they'll be able to get there and start and then it's on them to make the best use out of it. And then it's on them to now teach the next generation. And this is what we're focusing on is generational wealth. We want to see this compounding over and over every generation. So it does start here. And I do appreciate that. And there are no hacks, right? This is not a hack. This is part of a disciplined approach. So this whole conversation that we're having in all of these episodes, the entire concept of legacy at the table is a disciplined approach that involves children, involves the whole family, and it requires teaching and patience and discipline and responsibility. So this is not an easy fix. This is just a piece of that disciplined approach. Right. And it is one thing out of a plethora of things that we want to teach our kids. But this is the one that allows them to have the greatest comfort in their future, being financially responsible, being aware of how to use what's already in front of them. It's a great head start, right? It's a great head start. And sometimes people get head starts and then they trip up. But let's at least give them that opportunity to see what they can do with the head start. We have a son who just turned 15. Yes. So here's what we're going to do. We're going to call the credit card company and model how easy this is. Okay. Standby. Oh, to costo anywhere visa card. This call may be monitored or recorded. You are now in our speech enabled system to access our touch tone system. Press star star at any time. I know you're going to spend your time. Well, I'll get someone to help you. What's your security word, which may be the first five hundred attendees. This is the most exciting part of this. Make sure that when you do call the credit card companies that you give yourself enough time because sometimes navigating their phone systems could be very, very trying, but patience, because again, remember the end game. And also think about how wonderful it would have been if someone had done this for you. But now you're in a position to do it for your children for the next generation. And they will do it hopefully for the next. That's legacy. Hi, Sally. My first name is Richard and my last name is Stowell.

8:27 Esther I wanted to add an authorized user. And so I'm wondering if you allow authorized users on my city card account. Sure. Every authorized user though has to have their own membership. They have to have their membership number, their date of birth, not for their search. Okay. And can I do that online or do I have to call? Like can I do it online? Yeah, or you can do it with us either either one. Okay. Which number is better. So Costco membership and Social Security. Social Security and date of birth. And their cellphone number. Okay. And how young can an authorized user be? I believe it's 18 because they have to be old enough to get a Costco membership. Got it. Okay. Awesome. Thank you so much. That's it for now. Oh, you're you're welcome. You do have an offer on your account to earn 10% back from today through March 31st. You should card at restaurants or theaters. It comes up as a statement credit and it doesn't cost you like to add that. Yes, please. Our free money is always good. Absolutely. I'm going to text you the disclosures if you could just click on the link when it comes in and then at the bottom. Okay, you got it. You got it. Came through. Okay. Okay. Okay. Thanks for that. You're welcome. I hope you have a great rest of your evening. You too. Thanks. Bye. Sounds like you can find out a whole lot more by just calling your credit card company. So we recommend that you all take that inventory, call and see what offers they have for you. So that was a perfect example of us calling on one of the cards that we have and finding out that it's not beneficial to our kids that are younger than 18. But for the kids that are 18, that's a perfect place for them to start. Now, not every card is good for this. You want to card with one, a long history of on time payments to low credit utilization, meaning you don't use more than 30% of the limit and three, a card that reports authorized users to all three credit birds. Call your card company and ask, do you report authorized users to credit bureau? If they say, no, that card won't help your child with their credit report. We specifically chose cards with the longest positive history. One of our cards is over 12 years old with zero late payments. That's the one we use. Different cards have different age requirements. Some allow authorized users at any age. Others require 13, 15 or 16. Check with your specific card company. We added our kids as soon as the card allowed. The earlier you start, the longer the history they'll have by 18. And here's what some people miss. You don't have to give them a physical card. Add them to the account, but keep the card locked away. Or don't even activate it. Or cut it up. They'll still get the credit benefit. Once your child is added, monitor their credit report. You can check at annualcreditreport.com for free. It may take a month or two for the count to show up. And this is crucial. You have to maintain perfect payment history on that card. If you're late, if the utilization goes up, it affects your child's credit to. This strategy only works if you are the responsible parent. Let me share real numbers. Our oldest was added as an authorized user at 15. Two years later, his credit score was in the mid 700s. He's never had his own card. He never applied for anything, but he has credit profile. When he turns 18, he is able to get a good credit card on his own with a real limit, a good interest rate, and good terms. He can rent an apartment without a cosigner. He's starting from a position of strength. Absolutely. Compare that with his friends who will have no credit history, same age, completely different starting points. You know what I like about this is that we can do this and we have done it. And the kids don't even know we're doing it. We're just building this as a benefit. Now, we think it's important to have these conversations with the kids about what is going on. So they, when they finally do go to get their own credit card at 18, they kind of know what we've built into it. And why it's there, right? And only what we've built about. They know why it's important. That's the whole point. We're doing the work now so they have options later. Some people ask, isn't this game in the system? Here's how we see it. The system exists. The rules are what they are. Wealthy families have been using this strategy for decades. We're not breaking rules. We're following them strategically. And now, we're sharing a playbook with everyone. If you owned credit has issues, this strategy might not be right yet. Adding your child to an account with late payments or high utilization could hurt their credit, not helping. In that case, focus on improving your own credit first or ask a family member with excellent credit if they consider adding your child to one of their cards. What if my child misuses a card? Well, don't give them the card. You can add them to the account without ever handing over plastic or activate the card and keep it locked in a drawer or my favorite, cut up the card. As they get older and more responsible, you can give them limited access. But the credit benefit works whether they use the card or not. You know what I like doing? Sometimes when we go on vacations, we do let the kids spend from their card on the as an authorized user. So they can just practice swiping the card, seeing what the price is, double checking the receipts, making sure things work. So we're not spending any more money. They're not spending any more money than we otherwise would have. But they're sort of getting a practice for what it is like to

15:20 Esther spend on credit. When I was in college, I didn't even know how to use an ATM machine. Well, ATM, right? I remember going in, this is before it started taking cash. Before you had to put your money in an envelope. So I was just lost. I didn't know what to do. So I inserted my cash without the envelope. And then it occurred to me. And then I had to call the bank because the bank was closed that day. And I had to call them to kind of figure out like did my money get to the right place. And I would probably think that I was probably one of the people that made banks, you know, change their option to just inserting cash as a reverse to like putting things in the envelope. So that's what we're doing for our kids. We're teaching them these steps, not just showing them what to do or getting them credit cards, but we're actually going through the supermarkets with them and showing them how to use the kiosk or how to use how to talk to the teller or how to talk to the cashier and how to also know how much to get back in return. Yep. And that's confidence. And when our kids get older and they have to go out into the world themselves and figure these things out, that confidence is going to go a long way because we know that there will be people who try to take advantage of them because they can spot the newcomer or the person who doesn't exactly know how the payment system works. And so given that practice builds their confidence and so that when they go and do this on their own, they're masters at it. And they're absolutely independent. Here's what I want you to do this week. Step one, inventory your credit cards, which ones have the longest history, which have the best payment record, which report authorized users. Step two, call those card companies. Ask specifically, do you report authorized users to credit bureaus? What's the minimum age? Step three, if your children are old enough, add them. Do it this week. Don't wait. Step four, in the workbook, complete the credit building plan worksheet. Document which child is on which card and when you added them. The authorized user strategy is one of the most powerful tools you have as a parent. It costs you nothing, but it gives your child a tremendous advantage. Most families don't know this is possible. Now you do. The question is, what are you going to do with this information? Next week, we go deeper into credit. Episode six is about teaching kids how credit actually works. The mechanics, the math, and the mindset they need to use credit wisely. Because given them good credit, isn't enough. They need to understand it. They need to respect it. That's coming next. Until then, take action. Add your kids. Start their credit journey now. Because legacy isn't accidental. It is built on purpose. The content shared on the Broker's Table. Legacy at the table podcast is intended for educational and informational purposes only. While we discuss principles, strategies, and real life experiences related to finance, family, and faith, watching, or listening to this content will not make you rich or guarantee immediate financial success. True growth and lasting results require consistent effort, discipline, and wise application of the knowledge gained. The insights provided are meant to guide, inspire, and equip you to make better decisions over time. Not to serve as quick fixes or promises of instant wealth. We encourage viewers to thoughtfully apply what they learn in ways that align with their personal circumstances, values, and long-term goals.