BY SAM BECKER
Many young people in the United States face a common conundrum when entering the job market: It’s difficult to find a job without experience and you can’t get experience without a job.
There’s a similar dynamic at play when it comes to building credit. Millions of young adults don’t have credit histories or scores and may find it difficult to get loans or a line of credit as a result.
The traditional—or at least most popular—solution to helping young people build credit over the years has been for parents to add their children as authorized users to their own lines of credit. While that’s effective to a degree, Texas-based Austin Capital Bank has developed and launched a new credit-building tool to help young people build credit with relatively little risk.
The product, called FreeKick, is available in 48 states for young people between the ages of 14 and 25, and works as a sort of set-it-and-forget-it credit builder. Parents make an initial deposit and the credit-building happens almost automatically from the customer’s point of view.
Erik Beguin, the CEO of Austin Capital Bank, which he founded in 2006, tells Fast Company that there are roughly 50 million young adults who don’t have credit scores, or who are otherwise credit-invisible and that for years, “the only viable answer to solving that was to add them as an authorized user” to a parent’s credit card.” FreeKick, he says, is designed to be an alternative and a simple one.
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