The bottom line is that, because each child is different, and certainly every situation is different, you must look at all the factors before considering whether to help your child with their credit. For example, you may want to ask yourself the following questions:

• Do I feel like my child is responsible?
• Does my child have the means to pay off his/her debts that they incur (i.e., does your child have a steady source of income)?
• Has my child displayed responsible traits over the past couple years?
• How has my child handled money in the past?
• Have I taught my child about the importance of good credit?

If you answered “no” to any of these questions, you may want to reconsider handing over financial responsibilities to your child. If, however, you feel that your child is responsible enough to properly handle a credit card or other type of installment loan, then you may want to consider using your good credit to help your child establish his/her own credit.

You can accomplish this in one or two ways. First, you can put your child on your credit card as an authorized signer, or add your child to your credit card account as a co-applicant (provided, of course, he/she is at least 18 years old); both of which will help your child establish the credit necessary to begin building a positive credit history.

You may also want to act as a co-signer for a car loan. It is important to remember, however, that if your child defaults on the loan you, the parent, will be responsible for paying the debt or else your credit rating could be in jeopardy.

Both of the above mentioned options require a certain degree of faith and trust in your child, so always proceed with caution when putting your credit rating on the line.