I haven’t commented in a while, but parents who insist on hiding this information are the ones doing damage.
First off, if you did wait until marriage (like my parents successfully did), you will tell your children so as to set an example. Guess what? I still screwed up.
Now, my eldest already knows about us. She was 5 years old at our wedding. I’m not her father, but I am Dad. What she knows has not caused scandal to her. We have shared details of our past like financial hardship, relationship betrayal, loss of respect, emotional damage, and spiritual emptiness. She understands and believes that playing with spiritual fire will burn you if you are not wearing spiritual armor.
Share the negative consequences. Tell your children that there is tangible, mortal damage to sin, not just to the soul, but the mind and body as well. They will not think less of you.
As for their grandparents (my parents), after 42 years of marriage, obviously what they did works, especially since half the family is divorced.