Can Minors Build Credit Before They Turn 18?

Can Minors Build Credit Before They Are 18?

As a parent, you should always look out for the health and safety of your children. However, this includes their financial health as well. Teaching them how to manage their finances and maintain their credit score will have a huge impact on their future. If you help them establish good habits early and explain which factors will affect their score, it will make it much easier when they become independent. Not only will it become easier to obtain loans when they need them, but also to find and rent housing. So, if you are looking for ways to give them a boost into adulthood, here’s how you can help minors and young adults build credit.

Do Minors Have a Credit Score?

In most cases, minors don’t have a credit score because they have no credit history. If you take a moment to think about this, it should make complete sense. Since you can’t legally enter into contracts until you’re 18, minors can’t get approved for credit accounts.

However, there are some instances where a minor may have a credit score. For example, if the credit agencies mistakenly created a profile in their name, there will be a record of them in the system. Also, if someone stole your child’s identity and used it to open credit accounts, they could have a dismal credit history before they even become an adult. But, you can also help minors build a credit history if they are an authorized user on an adult’s account.

How Can Minors Build Credit Before They Turn 18?

For parents who want to help their children have a strong financial start in life, you can help them build credit before they turn 18. If you feel they are responsible enough, you can make them an authorized user on your credit card account. You will remain the primary account holder, retain authorization for access to the account, and full responsibility for all transactions. However, your children will benefit from your repayment habits and credit history. Although it doesn’t have the same impact as being the primary account holder, it gives minors a way to establish a credit history before they need one. Before you add them though, you will want to check with your credit card company to ensure they report the activity of all users on the account to the credit bureaus. Otherwise, it will not be an effective way to build credit.

Another option is to make your child an authorized user without giving them a physical card. This way, they receive all the benefits without the risk of overspending on the account. Although some credit card companies don’t have a minimum age limit, those who do typically require a minimum age between 13 and 15 for cardholders.

When Can Minors Start to Build Credit?

So, when can minors start building their credit history? The answer to this question really depends on the parent. If your child is responsible and you trust that they won’t abuse the privilege of having a credit card, you can make them an authorized user at any time. Or, you can add them to the account, and give them the physical card when you feel they are ready.

Even if you decide to wait until they become an adult in the eyes of the law, there are still things you can do to help them establish credit once they turn 18. One of the most common things parents do is cosign for a loan or credit card of their own.

Student Credit Cards

Student credit cards are specifically designed to help people start building credit. They work just like any other credit card. However, they typically have much lower credit limits and offer no incentives. While you don’t have to be a student to obtain one, you must meet their eligibility requirements.

Secured Credit Cards

Secured credit cards are another popular option for people trying to repair or build credit. You must pay a deposit, usually equivalent to your credit limit, in order to qualify. Using it to make small purchases and pay them off every month will help you establish a good repayment history. As long as you pay on time, the company will return the deposit when you switch to a standard credit card.

Credit-Builder Loans

Although they go by many names, credit-builder loans work much like secured credit cards. Also known as “Starting Over” or “Fresh Start” loans, these types of loans will require you to hold the amount you borrow in an account while you pay it off. While you won’t be able to access the money until you pay off the loan, it will report your payments and help you boost your credit rating. Not only will it help you raise your credit score, but also qualify for better interest rates on future loans.

Rent-Reporting Services

Unfortunately, if you are already struggling with your own credit score, consigning for another credit account may not be the best option. Another way to quickly build credit is to report bill payments for telecom and utilities. Some companies and landlords will offer the service for free. However, others may charge a small fee. If you pay all the monthly bills on time, it can add several transactions that show a strong pattern of debt repayment. On the other hand, any delinquencies will hurt your credit score.

Begin with a Strong Financial Education

You may decide it is best to wait until your child turns 18. But, you can still teach them responsible financial habits and how to live within their means. This includes showing them how to create and follow a budget, establishing good savings and spending habits, and explaining factors that will affect their credit.

If your kids understand the basics about borrowing and repaying debts, they will have a much stronger start in life.  And since they have time on their side, they can start early and begin building a strong credit history.

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Save Money by Renting Goats for Weed Control

Save Money by Renting Goats for Weed Control

If your property has become overgrown by brush and invasive plant species are taking over, perhaps it’s time to consider goats. Yes…that’s right, goats. These hearty animals will eat a wide variety of weeds which makes them effective eating machines when you need to clear large tracts of land. And, it provides a safe and natural alternative to harmful herbicides. However, the most convincing reason is that you save a ton of money by renting goats for weed control. So, if you are looking for ways to avoid renting machinery or hiring labor, here’s how a herd of goats can eat away at the total expense.

Why Are People Renting Goats?

People have been raising goats for thousands of years. Nowadays, some have used them to create lucrative business opportunities. With the many harmful side effects of harsh chemicals and herbicides, more people are looking for more eco-friendly options. Goats are a natural way to clear brush and overgrown yards or commercial lots.

What makes them so effective is that they will eat just about anything. They will happily munch on the weeds and invasive plant species such as poison ivy, poison oak, sumac, kudzu, milk thistle, knotweed, wisteria, and reed grass, just to name a few. However, some plants are toxic to goats and must be removed before they can graze. But, goats can handle most of the bramble and thorny plants you wouldn’t want to remove by hand.

Although there are many benefits in using goats for weed control, here are some of the most common reasons why people prefer using them:

  • Goats quickly clear the land you want to use.
  • They provide natural fertilizer and enrich the soil.
  • Their hooves till the soil, saving you a ton of labor if you plan to use the area for gardening.
  • Goats are excellent climbers, meaning they can reach places machines can’t. So, they are more effective for steep, rocky terrain and wetlands.
  • It eliminates the use of herbicides which can harm your health and the environment.
  • Targeting grazing is a great preventative measure in areas prone to wildfires.
  • Renting goats is much cheaper than hiring a landscaping company.
  • You don’t need a permit to let goats graze on your land.

How Can You Save Money by Renting Goats for Weed Control?

Although there are many practical benefits for renting goats, let’s discuss the dollar and cents of it. In addition to all the environmental benefits, here is how you can save money by renting goats for weed control.

1. It is cheaper than paying for a professional landscaping service.

First and foremost, using goats is much cheaper than paying for professional weed removal. Landscaping companies typically charge between $50 and $100 an hour for their services. Depending on the size of your lot and the density of the overgrowth, it might cost you anywhere from $2,000 to $4,000 per acre to clear and remove all the yard waste. On the other hand, you can rent a herd of goats for about $400-$800 per acre. If you go with the goats, you can save a lot of cabbage.

2. There are no disposal fees.

This brings me to the second point: you don’t have to pay for disposal fees. Since the goats are eating the yard waste, there is no debris to burn or haul away. So, you can completely avoid the cost and further reduce the total bill for weed control.

3. They provide free fertilizer to enrich the soil.

Another added benefit is that goats will provide free fertilizer. As any gardener will tell you, nothing beats good, ol’ fashioned fertilizer to enrich your soil. Hiring goats will provide a nutrient-rich base if you want to lay sod or plant a garden in the area they are clearing. So, you can spend less money on expensive potting soils from your local gardening center. And, the goats will even till it into the soil with their hooves, saving a lot of man-hours.

4. You don’t need to buy herbicides for future treatments.

If you rent goats to get rid of your weeds, you don’t need to spend money on herbicides down the line. While more resilient weeds will return, you can clear the majority of your weeds in a single visit. The first time that you use targeted grazing takes the longest since there are years of growth to clear. However, a few more applications should clear all unwanted foliage from your property and eliminate the need to use herbicides.

5. You can save even more if assist.

If you don’t have facilities that are suitable for livestock, it can take some time to prepare. However, some companies may offer a discount for those who are willing to roll up their sleeves and get their hands dirty. With more people to assist, it greatly reduces the time and labor costs of setting up. So, offering to help remove toxic plants, set up electric fences, or feed and water the herd could drastically cut the final costs.

Where Can You Rent Goats?

For those looking to rent goats, you can do a local search to see if there are any goat rental services near you. If you aren’t getting any hits, look up other keywords like “targeted grazing” or “conservation grazing” to widen the search. Be sure you check the reviews to choose the best fit for your job.

However, this is still a relatively new business idea. You can always ask for a referral from someone who knows about renting goats for weed control. Or, you might try contacting local farmers who keep goats. Even if they don’t have a rental company, they may be willing to offer their services for the right price.

Why Aren’t More People Using Goats?

Many people still prefer the fastest and easiest methods for weed control. It takes time for the goats to eat, and even longer when all their favorite vegetation is gone.

Furthermore, using goats won’t give you the same finished look that landscaping companies offer. They cannot distinguish between weeds and manicured landscaping. So, they may decide your shrubs and expensive flowers are more preferable to the weeds you want them to eat. Although it is effective, it isn’t always pretty.

Finally, renting goats is not practical for smaller pieces of property. Most companies have a one-acre minimum for jobs they take. They have a limited number of animals, so they have to choose jobs that will be profitable.

However, if you think goats are the right answer for you, contact local companies for quotes and see just how much you can save!

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Can You Have Two Car Loans At Once?

, can you have two car loans at once

When purchasing a car, the process can be daunting, especially if it’s your first time. However, it’s fairly simple and straightforward. That is, as long as you have decent credit. First, you find a vehicle that fits you and your monthly budget. Then, after settling on a price and putting some money down and/or trading in another vehicle, you’ll sign off on a loan. This will likely be handled by the dealership. Then you’ll drive your new-to-you car right off the lot.  But, what if you’re buying two cars at once? How about if you’re buying another car before your other vehicle loan is paid off? Can you have two car loans at once?

Can You Have Two Car Loans at Once?

You may find yourself in a situation where you may need to have two car loans out at the same time. Whether you and your spouse both need transportation to work, or one of the kids is going off to college, there are times when the only solution is buying another vehicle. However, you’re likely wondering if you can afford a second one, or if it’s even possible to carry two car loans at once. Whatever your personal circumstances for needing the second car loan, the answer is typical of most finance questions: it depends.

As with any loan, your approval comes down to a number of factors; mainly, your credit. Let’s break them down.

Getting Approved for Two Car Loans

There are a few key factors that will be considered for multiple loans. Here’s what lenders look at when evaluating your application:

1. Credit History

Not surprisingly, one of the first things a banker or lender will look at will be your credit history. They will obtain and review your information, which will include your credit score, repayment history, other loans on file, inquiries, and all public records pertaining to your credit.

This is the primary source of information banks use when deciding to give you a second loan. Keep in mind though, that even if the bank approved the first loan, it does not mean this second will go just as smoothly. Each application is reviewed based on your current circumstances and market conditions.

2. Proof of Income

In addition to credit history, those loaning you the money will want to see proof of income, for obvious reasons. Lenders need to know that you can repay the loan according to the terms they are offering. Therefore, providing proof of income shows them that you have money coming in regularly and gives them assurances that you won’t default on your loan. Most institutions want to see that you have worked for the same employer for at least two years, or have another steady source of income that will cover payments.

3. Debt to Income Ratio

Other factors that banks look at when you apply for a second car loan may also include your debt to income ratio. If your debt ratio is 50% or more, you may have trouble getting approved for a loan. This is true even if you have a good salary. Writer and real estate investor Michael Bluejay notes on his website that each bank differs. But in generous cases, your bank may permit you to have a 42% debt ratio. You can find out how to calculate your income to debt ratio here.

4. Down Payment

Any reputable dealership will require a down payment before you drive off the lot. Lenders want some guarantee that they will recoup at least partial value of the car if you default on your loan. Therefore, most require at least a 20% down payment. However, if you make a larger down payment, some lenders may overlook the less favorable aspects of your credit history. A bigger down payment means a smaller loan, and therefore, less risk they will lose money.

5. Pre-approval Options

Although you may have to talk to several banks, credit unions, or dealerships, look for one that offers pre-approval. It is better to know that you have the funding before you start car shopping rather than finding the car you want but not having the money to buy it. And, having a letter of pre-approval gives you more leverage. It demonstrates to the dealer that you understand your financing options and allows for better negotiation on price.

Things to Keep in Mind

Be aware of the “straw” purchase.

A “straw” purchase is when you buy a car for someone else, but put the loan under your name. This is considered bank fraud, and thus, it’s illegal. One reason for this is because a car is considered collateral. If you are trying to purchase a vehicle for a loved one, you should sign as a co-signer or give them cash to put toward their purchase. They are not able to own the car if the loan is under your name. However, if the individual is your dependent, then it is a different story since you would accept ownership and responsibility for the car.

Having multiple loans is a huge financial burden.

Taking on two car loans at the same time is a huge financial responsibility. Not only will you have the additional payment each month, but it will also affect your credit. Your credit score will take a hit and temporarily lower after you take out the loans. You can recover from this as long as you don’t miss your payments, but it does take time.

Furthermore, you will also have a higher debt-to-income ratio. This will make it more difficult to obtain good rates from future lenders. It will also make it difficult to improve your credit score with such a heavy financial responsibility. However, those with good credit, limited debt, or a strong income likely won’t be as affected. Although a second loan may not impact your situation much, it is still wise to think through all your options before signing anything.

Ask yourself if you need the loan.

Reconsider the loan to save on interest if you can pay straight cash. If you don’t plan to use the car as a daily driver, it may not be worth taking out a loan. If you only want it to shuttle people around or for limited driving purposes, there may be better options than going deeper into debt.

Conclusion

So, can you have two car loans at once? Yes, but not without meeting some basic requirements. Cases and circumstances do vary. So, you want to make sure you would even qualify for a second loan by speaking with a few lenders before picking out that next car. You’ll also want to review the interest rates you would receive as they might be higher depending on your current loan status.

Have you ever had to take out more than one car loan at the same time? Share your experience in the comments below!

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