Experian credit check: a useful tool to help teens learn safe borrowing
It’s easy to think that your little ones will be little forever, but there comes a point when we all have to admit to ourselves that our kiddies are growing up and will, one day, have to look after themselves in this big scary world of ours. As parents, it’s our job to prepare them for their impending independence as much as possible, and when children turn into tweens, pre-teens and teenagers, it’s time to start them on the most important course of all: Money 101. From setting basic ground rules to performing an Experian credit check, there are some simple ways to get your kids to wise up on money matters in no time.
Learning how to manage and look after money is something that not all of us do at an early age – and this is why so many people have problems later! We should be teaching children the value of money as soon as possible, but when kids turn into teenagers, they need to know more about how money really works. This includes lending, borrowing, and of course, paying back money. Very few people make it through their entire lives without ever having to borrow for anything, and unless you intend to set your kids up for life with a huge living allowance, property deposits and an inheritance to boot, you can bet they’ll need to borrow money sometime, too. Anyone who’s ever done a credit check online knows just how much your credit can be affected by borrowing behaviour in the past.
One simple way you can start this lesson off is by allowing your younger teenagers to borrow money from you when they need it; but don’t just give it out and never expect to get it back. If they’re only borrowing it, you need to chase them up about it later. Better yet, ask them before they borrow money from you how they’re going to make the money to pay it back, and try to agree on a date that they should be able to pay it back by. Got a summer job starting in a month’s time? Tell them you’ll be coming to collect when their first wages come in.
Of course, once you think your teens have mastered the basics of borrowing, if you trust them enough you could take the next step and get them a credit card of their own. This will have to come with rules, of course – set a spending limit and make it clear what the card can and can’t be used for right from the start. While this may sound like a daunting step forwards, your teenagers need to respect that there is a big difference between borrowing off mum and dad and borrowing from a bank. Make sure they’re paying the card off regularly and in good time, and revoke this privilege if they fail.
You can also show them their credit rating online by performing a credit check, and use this as a teaching moment to show them how their behaviour in borrowing and lending directly impacts their future potential to borrow. By showing them how their own credit profile has been affected by their habits already, you can really bring home the point that borrowing money – and paying it back – can affect your credit status for the rest of your life, and it needs to be done right from the very beginning.