Can a Minor Have a Credit Score? Here’s How It Happens

A credit score is a numerical representation, typically a three-digit number ranging from 300 to 850, that indicates an individual’s creditworthiness. Lenders use this score to assess the likelihood of a borrower repaying loans or credit lines. It is derived from a person’s credit history, which includes details about active accounts, debt levels, and repayment patterns. While many assume minors cannot have a credit score, certain circumstances and actions can lead to them developing a credit history and, consequently, a credit score.

The Age of Majority and Credit Contracts

The age of majority, generally 18 in the United States, marks the point at which an individual legally gains the full rights and responsibilities of an adult. This includes the capacity to enter into binding contracts, such as credit agreements. Prior to reaching this age, minors are typically considered to lack the legal capacity to form such agreements. This protects young individuals from unfavorable financial decisions due to inexperience.

Consequently, financial institutions are generally unwilling or legally unable to issue credit directly to minors. Lenders require legally enforceable contracts; a minor’s contract is typically voidable at their discretion, leaving the lender without recourse. Therefore, direct credit products like personal credit cards or loans are almost exclusively reserved for individuals who have reached the age of majority.

Pathways to a Minor’s Credit History

Despite legal restrictions on direct credit, a minor can still acquire a credit history through several indirect pathways. One common method is becoming an authorized user on an adult’s credit card. As an authorized user, the primary cardholder’s account activity (payment history, credit limit, and balance) can be reported to the credit bureaus under the minor’s name, allowing the minor to benefit from responsible account use without legal debt responsibility.

Another less common scenario is a minor becoming a joint account holder with an adult; this typically requires the adult to assume full legal responsibility and is not permitted by all financial institutions. In such cases, the minor’s name would appear on the account, and its activity would be reported to credit bureaus. A more concerning, negative pathway for a minor to have a credit report is identity theft, where personal information, such as a Social Security number, is fraudulently used to open accounts.

Understanding a Minor’s Credit Report

If a minor has acquired credit history through authorized user status, a joint account, or identity theft, a credit report may exist. This report would contain details related to associated accounts, such as payment history and credit limits of authorized user accounts. It might also show fraudulent accounts if their identity has been compromised. However, it would typically lack extensive personal credit history or minor-initiated loan applications.

Parents or legal guardians can check for a minor’s credit report, though the process differs from an adult’s. This often involves contacting the three major credit bureaus (Equifax, Experian, and TransUnion) and providing documentation, including the child’s legal name, address, birth date, birth certificate, and Social Security card. Some bureaus may also require proof of guardianship. If sufficient data is present, a credit score would be generated, reflecting the reported activity.

Building Credit Early

Parents or guardians can help a minor establish a positive credit history, providing a financial advantage later in life. Strategically adding a minor as an authorized user on a well-managed credit card account is an effective method. The primary account holder must maintain timely payments and low credit utilization, as this positive behavior will be reflected on the minor’s emerging credit report. Some card issuers may not report authorized user activity for minors until they reach age 18.

Once the individual reaches the age of majority, secured credit cards can serve as an additional stepping stone. These cards require a cash deposit, which typically becomes the credit limit, reducing risk for the lender and making them easier to obtain for those with limited credit history. Small installment loans or credit-builder loans, often available through credit unions, can also help establish a payment history. These loans typically involve the borrower making regular payments into a savings account, with the funds released once the loan term is completed, and payments are reported to credit bureaus.

Safeguarding a Minor’s Credit Identity

Protecting a minor’s credit profile is an important responsibility due to their vulnerability to identity theft. Parents should regularly monitor for unauthorized activity by checking their child’s credit report with major credit bureaus. If a report exists unexpectedly, it could signal identity fraud. Signs of identity theft can include receiving pre-approved credit offers or collection notices in the child’s name.

An effective preventative measure is to place a credit freeze on a minor’s credit reports with all three major credit bureaus. This action restricts access to the credit file, making it difficult for new accounts to be opened fraudulently. The process typically involves submitting specific documentation, including identification for both the parent and child, and proof of the parental relationship. Safeguarding a minor’s Social Security number and other personal data is important, as this information is a primary target for identity thieves.