DAYTON, Ohio (WDTN)–  When you have little or no credit, it can be tough to build credit and young adults who have no credit cards of their own may run the risk of entering adult life with no credit. River Valley Credit Union’s Eric Ebbert visited Living Dayton on Tuesday with tips on how people can prepare and build credit along their career paths.

Ebbert says having thin credit makes it difficult to rent an apartment or get a decent rate on auto insurance, among other things because landlords and insurance agents often use credit scores to decide whether someone is trustworthy enough to do business with. Sometimes, parents add a child to one or more of their accounts as an authorized user, so the child is in essence “piggybacking” on their good credit behavior. Adding an authorized user to a credit account can help boost their credit if you already have a healthy credit score and practice smart financial habits such as paying your bills on time every month. Ebbert advocates for parents adding their child to an account to help them build a credit file as a better choice than co-signing for a credit card for a young adult.

However, Ebbert says there are a few things to take into account before adding an authorized user:

  • If the credit owner doesn’t have a great score, it could negatively impact the potential authorized user’s score, too.
  • The authorized user is not legally liable for the charges they incur.
  • Some issuer do not allow authorized users or no longer report authorized users to the three main credit reporting bureaus. Make sure you ask.

To get more information, click here or watch the segment above!

***This segment was sponsored by River Valley Credit Union***