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The earlier people can be exposed to banks, the more likely they are to have better credit and financial stability as adults, according to a new study co-authored by Leeds Associate Professor Tony Cookson.

In their new paper recently published in the Journal of Financial Economics, Cookson and fellow authors from Iowa State and Boston College found that children’s exposure to financial institutions early on is a substantive factor on future financial health. Their work demonstrates how kids’ experiences with these institutions have a long-term impact on their credit and financial literacy, as well as the trust they have in banks, later in life.

Key to their research was data collected from Native American reservations following the passage of Public Law 280 by Congress in 1953. The impact of this policy is attributed to less banking activity on tribal court reservations.

Consequently, individuals growing up on tribal court reservations had less exposure to banking activity and, over time, less credit history, lower credit scores and higher delinquency rates when borrowing money.

Cookson and his colleagues’ research emphasizes the importance of building financial literacy as children through interactions with financial markets and banking institutions. You could say their future credit depends on it.

Read Cookson’s take on growing up in a bank desert.