MW I took out a $500 loan for my daughter, 18, to build a credit score, but nothing happened. What did I do wrong?

By Aditi Shrikant

'She still has no credit score'

"According to Credit Karma, she has no active accounts." (Photo subjects are models.)

Dear Dollar Signs,

When my daughter was 18, I took her to my credit union - where she has her savings account - to take out a $500 loan so she could start building her credit score. That was in March. She's been paying the loan each month since (seven payments so far), and I keep on checking her Credit Karma score. Nothing has been posted. According to Credit Karma, she has no active accounts, so she still has no credit score.

Why does it not show up yet?

The Mother

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Dear Mother,

Your daughter's credit score might not be showing up on Credit Karma because there is no legal requirement for lenders to report to the credit bureaus which loans they've issued. Typically, credit unions report what they've lent about once a month, but perhaps the one you use does so less frequently.

Ask your credit union how often they report their lending. Check FICO $(FICO)$ or Experian (EXPGF), as they use a different scoring model than Credit Karma. Credit Karma uses VantageScore 3.0 to assign a credit score, while Experian uses the FICO credit score. (Your daughter could find out if she has a FICO score by checking through services such as myFICO.com.)

For what it's worth, VantageScore 3.0 is more forgiving for "thin files" than some older scoring models, as it can generate a score with as little as one month of credit history and one account reported within the last 24 months.

In other words, your daughter might have some credit history that isn't recorded on Credit Karma. She could be "unscorable" or "credit invisible," which simply means a thin file. That means she has a credit report with little activity and lacks enough of a credit history for credit bureaus to generate a FICO or VantageScore. That would make it hard for her to get a loan or open a standard credit card.

Explore different avenues for building credit, like getting a student credit card. Your daughter is young and there are lots of routes she could take to secure a financially sound future.

While it's good for you to know all this information, I hope that your hands-on parenting approach isn't discouraging your daughter from being independent. She is 18, after all. And while finances are important, so are the problem-solving skills that your child needs to hone. Right now, she is old enough to do her own research, but young enough so that a few missteps likely won't ruin her life.

How to build credit

Prioritizing your daughter's credit at such a young age is a smart move, according to Ted Rossman, an industry analyst at Bankrate, a personal-finance website.

"One mistake I see from young adults is they wait too long to establish credit," he said. "It does take time to build up a credit history."

It can be tricky to get a credit card when you've never had one. "It's like a job," he said, "Everyone wants you to have experience to get experience."

There are other ways to build credit without taking out a loan. For example, you can make her an authorized user on one of your credit cards, Rossman said - "assuming you pay [your credit statement] on time and keep your debt relatively low."

There are many secured cards she could get with Capital One or Discover. They require a security deposit that is usually equal to the credit limit, but they are easier to obtain for people with no or poor credit.

Take a step back

Like I said, your impulse to build your daughter's credit makes sense. However, I wonder if you are controlling her financial narrative a bit too much. Kids learn the most when they have to make decisions themselves.

Even if your daughter is paying off her loan on time, does she know why it's important and how else she could be building her credit history?

Allowing children to make minor decisions is good practice for making weightier decisions down the line, said Michaeleen Doucleff, author of "Hunter, Gather, Parent: What Ancient Cultures Can Teach Us About the Lost Art of Raising Happy, Helpful Little Humans."

"The problem in our society is that we don't allow children to have these baby steps at the beginning," she said. "We don't let our kids play outside and then are surprised they can't ride their bike to school."

You can offer counsel without getting overly involved. Tell her that credit is important and the earlier you start building it, the better. Then let her decide the next steps.

You can also influence her decisions by modeling good money habits, although that alone obviously won't generate a credit score. Are you mentioning how often you're making credit-card payments or taking her to the bank when you're handling your own finances?

"Kids are not stupid," Doucleff said. "Someone doing something for you, that's not how people learn practical things. Kids, adults, we learn through practice."

While it's OK to offer some guidance from the passenger seat, your daughter should ultimately learn to steer the wheel of her own financial life.

Write to Dollar Signs at dollarsigns@marketwatch.com.

-Aditi Shrikant

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November 18, 2025 09:58 ET (14:58 GMT)

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