So how can you as a parent help your teenager build their credit score?
- Parents can leverage THEIR good credit by adding their teen as an authorized user on an existing credit card. This option entails very clear boundary setting between parents and teens in addition to diligent credit card account balance monitoring by the parent.
- If the teenager is employed, guide them through the process of researching - then opening a credit card in their name.
Mistakes to avoid?
- Always control the limits on the cards.
- Maxing a card out, then only paying the minimum. This is a habit teens should be taught to avoid from the start.
- Make it clear: just because you have a credit card, that doesn’t mean you should use it. Set a budget, only buy what you need – and ultimately what you can afford to pay off IN FULL each month.