How parents are helping their young kids build credit scores

A survey from LendingTree shows about one-in-four parents have authorized a child under the age of 18 on their credit or debit card in an effort to give their kids a head start on establishing their credit rating.

While Shannon Ho plays pretend shopping with her daughters — Aria, 2, and Gemma, 1 — she's also teaching valuable life lessons about money at a young age.

The two young children have two credit cards each. Ho and her husband, Jeremy, added both daughters as authorized users on their existing card accounts.

"I figured why not? My parents did it for me when I was a kid. So, I did the same for my girls," she said. "My 1-year-old has no idea what's going on. My 2-year-old, however, I do take her to Target every week to buy her cheese crackers and her snacks and she picks two items and she gets to pay. She taps and pays."

With each tap, Aria is building her credit history, which will help determine her credit score.

For Ho, it's also about her children learning the value of a dollar.

"It's a habit we build from a young age to spend only what you are given or what you can afford and nothing more," she said.

Financial advisor Winnie Sun said it's never too early to start building your credit, adding that many banks, including Capital One, Bank of America and Chase, allow kids to be authorized card users as long as they have a Social Security number.

Sun described it as "your financial GPA."

"If you have a good one, that enables you better rates on your mortgage, better rates on your car loan … and most importantly, a lot of employers are actually looking for a high credit score in order to give you that next job too."

If you decide to start helping build your child's credit score, remember these tips:

• Pay your bill in full and on-time every month to avoid passing down a negative credit score
• Monitor your bills to ensure there are no unapproved purchases

• Credit Scores
• Credit Cards