...Parents putting their credit scores on the line for their children
Miami, FL (PRWEB) December 05, 2014
In an article published on December 3, 2014, National Debt Relief talked about how children are able to have an effect on their parents' credit scores. The article titled “2 Ways Your Credit Score Is Compromised By Your Kid” looks into two of the most common mistakes parents make when dealing with credit and their children.
The article starts off by pointing out that parenting is a tough job. Not only do parents need to be physically and emotionally ready to raise children, but parenthood is also a financial decision. It takes money to prepare for children as well and a lot more of it to put food on the table, clothes on their backs and a roof over their heads.
But as this responsibility dawns on parents, a lot of people might be surprised to know how much their children are able to do harm on their credit score. As parents have meticulously built up their reports and consciously pay financial obligations on time, their children can actually have an adverse effect on their scores.
One of which is when parents co-sign loans for their children. The article explains the process as the parents putting their credit scores on the line for their children to be approved for a loan. This is most common in private student loans for the simple reason that children rarely have enough credit history to be approved for a loan.
The danger here is when the children are unable to pay for the loan. This will automatically reflect on their scores and most importantly, the parent’s credit score. Although most lenders provide a cosigner release clause in their contracts, there are qualifications that need to be met to release the parents from the loan obligation and their children to take full responsibility for it.
The article also explains that extending credit to children by nominating them as supplementary card holders can also affect credit scores. This is usually done by parents in their bid to teach their children on how to handle credit. As children purchase items using their cards without thinking and neglect to pay, they can cause credit scores to go down.
To read the article, click this link: [http://www.nationaldebtrelief.com/2-ways-credit-score-compromised-kid/