Understanding How To Help Your Teen Build Their Credit

Did you want to build your credit score as a teenager?  Probably not!  That’s why it makes sense that consumers between the ages of 18 and 34 have an average score of 629.35, which is considered a poor score.  Make sure your teen understands what a credit score is and how a poor score can affect them - you’ll save them so much time and money as they transition into adulthood:

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.