Teach Your Kids About Sound Money Management

Learning how to manage and save money should begin as early as possible. Teach your children to be financially responsible. All good education begins at home, and that definitely includes education in money management. If your kids learn well, they'll reach adulthood with the ability to buy a home and begin building financial equity throughout their lives.

You may have to help them get that first line of credit, because they'll have no financial history to show lenders, but from there they'll have a beautiful credit score and clear sailing. It's a shame that schools don't include this subject, because it would save a lot of headaches and heartache if they did. However, it is up to you. And if you've had credit problems in the past, perhaps teaching your children will help you build some sound money management practices yourself.

Begin when the kids are old enough to start asking for money - be it a quarter to put in a candy machine, or a new toy. Give them a small allowance each week, and show them how to budget. Let them learn first hand that if they put it all in a candy machine, one quarter at a time, they'll never have enough for that special toy.

No one can spend the same dollar twice, so they need to learn to make choices about where their money goes. Next, teach them about bank accounts. Begin with a savings account and let them make the deposits and watch the balance grow. Then teach them about checking accounts and the necessity to keep careful records. Be sure to explain how their little nest egg will help them later, when a good credit score becomes important.

Show them how foolish mistakes can make their money melt away. Overdrafts and late charges are such a disappointing way to spend money - you get nothing at all for your dollars. 1 over your balance on a check you write, those fees can really add up. By high school kids should be learning about credit reports and credit scores.

And they should be learning about the importance of knowing your credit score. So get your free credit report today and see what it says. If your credit score needs to be improved, start working on it now, so that you can also teach your kids what they'll need to do if they should slip.

5,551 in debt, according to the credit bureau Experian. 1 trillion in credit card debt, more than any country in the world. Here are four ways consumers can create a credit history without falling into the credit card trap. Bills like rent and utilities traditionally aren't used to create a credit history - only loans are. But new companies and scoring models are springing up that include monthly bills like rent, said Robert Harrow, a credit card specialist with ValuePenguin.

Those bills include rent, cell phone, internet, utility and medical bills. While these new models aren't commonplace, about 26 million people -- or 11 percent of the U.S. That's prompted companies to look for ways to reach that "credit invisible" population, he said. One of those companies is ECredable, a credit bureau that uses data not traditionally used by the big credit bureaus of Experian, TransUnion and Equifax. ECredable instead relies on information such as rent and cell phone bills to create its own credit score for consumers.

Steve Ely, the company's chief executive officer. Companies such as Churchill Mortgage will give home loans to people without a credit history, said Erik Spencer, a senior loan officer with the company. Churchill taps alternative information such as on-time rent and utility payments to establish a credit history. With a traditional credit card, the consumer gets a loan from a lending institution and pays interest on the money they borrowed. With a secured credit card, the consumer uses their own money to fund the credit card and that becomes the line of credit for the account.

The lending institution then reports to the credit bureau that the consumer is paying the secured card on time. But consumers need to watch out for fees when using a secured card. This is an especially popular way to build credit for young adults or even spouses. The person without credit is named on the credit card or auto loan of someone with established credit. This creates a history for the person without credit. The starter loan works similar to the secured credit card but because they are issued by a credit union, any fees tend to be less expensive.

The consumer deposits money with the credit union and uses and pays back the money to establish credit. So it's possible to live without a credit card, Spencer said. And for hotel and rental car reservations, consumers can use the debit card attached to their savings or checking account, he said.

No credit score: Do you need a “bad credit home loan”, To get the best mortgage rates, you really do need a high credit score. But you can buy without resorting to bad credit home loans if you don’t have a score. 1. Conforming and government-backed programs require that when applicants have no credit score, “the lender must establish an acceptable nontraditional credit profile.” That means verifying your payment history with your landlord, utilities, even regular deposits to your savings account. You must have at least three sources of payment history.

2. The lender can research your history itself, but will more often order an NTRMCR (non-traditional mortgage credit report) from a credit service. This may cost more than a “regular” credit report. 3. The challenge is that with no score, any negative information is likely to make you ineligible for prime financing.

To get the best mortgages available, you need a credit score. But you likely don’t have to resort to a bad credit mortgage. What is a credit score and how do you get one, Your credit score, also called a FICO score, is a three-digit value ranging from 300 to 850. Three major credit bureaus, Transunion, Equifax, and Experian create your score based on your credit history.