Question: Should I Add Children As Authorized Users?

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Josh asks:

I was wondering what your take is on adding your children’s names to house mortgages, cell phone plans, etc. to help them build credit before they actually need it.

My response:

Hey Josh,
FICO (Fair Isaac Corp, the folks who created the equation for credit scoring) recently dropped authorized users from their score calculations so doing this will no longer help them build credit. Given that new development, I don’t think adding your children’s names to accounts will help much anymore. If they’re students, I’d recommend having them try to get a student credit card on their own (using the college costs as their income) if you want to build credit.

Here’s the article on the authorized user thing I mentioned above.

Now, the only thing I’m not 100% sure about is whether adding them on other accounts, since they’re technically not authorized users on something other than a credit card, is helpful. However, I would think that adding them on the house mortgage isn’t something that is going to be all that easy (or even possible) anyway.

Getting a cell phone plan might actually help though because that’s an account that will appear on your credit history and might help your score, or at least give you some sort of history. Not being a credit score or history expert, I’m not sure. Anyone know?

{ 4 comments, please add your thoughts now! }

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4 Responses to “Question: Should I Add Children As Authorized Users?”

  1. plonkee says:

    I was under the impression that having a contract mobile phone (as opposed to pay as you go) did go onto your credit history and improve your score.

  2. I’m pretty sure you can also still help someone build credit by adding them as a joint (not authorized) user.

  3. Dustin says:

    My credit report does not include my cell plan which I am the primary person on for the family plan.

  4. Keith says:

    When I worked for Sprint, they don’t report to credit agencies that you have an account and that you pay it on time (not sure about other carriers). However, if you go into collections, we report it.

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