Tips For Helping Teens Build Credit

Establishing good credit is essential, and like many things in life, the earlier you start, the better. While the need for a solid credit might seem far off at this stage in life, getting a leg up on your credit history can pay dividends down the road. Here are some tips to help you or your teen build their credit score.


  • Start with a prepaid card – While getting a credit card for your teen might seem like a logical first step to building their credit, it could also be a good idea to start them off with a prepaid card to assess their spending habits. Once they’ve demonstrated that they are financially responsible enough for a real credit card, you can move onto the next step.
  • Get a secured or student credit card – A secured credit card works almost identically to a regular credit card, but it requires the user to pay a refundable down payment equal to the card’s credit limit, and can be a great first step in introducing your child to the world of credit building and credit cards. Another solid option for students is getting a student credit card. These cards have fewer requirements to qualify, low or sometimes no annual fees, and often reward responsible financial behavior.
  • Add your child as an authorized user on your credit card – Another option for those getting acclimated to the world of credit building and credit cards is adding your child as an authorized user to your credit card. This allows your child to use your credit card without being the primary cardholder, and can help them learn how to responsibly use a credit card early on.
  • Open a checking and savings account – Responsibly managing a checking and savings account will show a financial institution that your child can handle money. This will help when opening a credit card for him or her later on.
  • Cosign for a loan with your child – Since many teenagers who are just beginning to build credit may not qualify for a loan or credit card themselves, cosigning for them can be a good option for getting them started. However, by cosigning, you are accepting equal responsibility to ensure payments are made on time, as you are contractually obligated to repay the debt if your child fails to do so. A common example where a cosign may be necessary is student loans.

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