Most of us learned about credit the hard way, after our first card or loan. Kids can learn the basics much earlier, because credit is built on habits they already practice: doing what they said, on time, and not borrowing more than they can pay back.
What a credit score is, in kid terms
A credit score is a number lenders use to guess how likely someone is to pay back what they borrow. In the United States, the best-known scores come from scoring models like FICO and VantageScore. The details differ, but they look at the same kinds of habits.
The habits behind a credit score
Paying on time. Payment history is the biggest part of most credit scores. For a child, the closest habit is doing chores when they are due.
Not borrowing too much. Using most of the credit you have can lower a score. For a child, that means not borrowing close to their limit.
A long history. Scores tend to reward accounts kept open and in good standing for a long time. For a child, that is keeping a chore going week after week.
A healthy mix. Handling different kinds of credit well can help. For a child, that is doing different kinds of chores.
Not asking for too much at once. Applying for a lot of new credit in a short time can lower a score. For a child, that is not asking for too many things at once.
Five ways to teach credit at home
- Talk about on time. When a chore is done on time, say so. It is the most important credit habit there is.
- Let kids borrow a little. Lend a small amount for something they want and agree on when they will pay it back. Then follow through.
- Make wanting something a conversation. When a child asks for something new, talk about what it costs and whether it can wait.
- Hold a short weekly check-in. Ten minutes a week on what went well, what didn't and what's next builds the habit of looking at your money.
- Use a score they can understand. Kids follow a number that moves when they do something.
How Kiddie Kredit teaches credit
Kiddie Kredit gives kids a Kredit Score from 0 to 100 that works more like real credit. It has five parts that mirror the habits above: chore history (on time counts most), Bamboo Bucks use (paying back on time helps, borrowing close to the limit lowers it), chore age, chore mix, and reward wishes (each wish dips the score a little, like asking for credit). A missed chore costs a little, and doing the next ones on time wins it back.
The Kredit Score lives only in Kiddie Kredit. It is not a real credit score and is never reported anywhere.
Frequently asked questions
What age should you teach kids about credit?
The habits can start as young as 4 or 5. The words, like interest and credit score, make more sense from around 8 or 9.
Can a child have a real credit score?
In general, a credit report starts when someone opens their first credit account. Some parents add a teen to their own card as an authorized user. Check with your card issuer about how that is reported.
Ready to start? Kiddie Kredit is free to start on iPhone, iPad and Android, and our guides walk through every screen.
