How to Help your Teen Start Building Good Credit


If you have teenagers in your home, you’ve likely started to think about helping them prepare to enter the real world. And, as every adult knows, strong credit is a huge help to success in that realm. No credit? No problem. Here’s how to help you teenager — or teenagers — responsibly build good credit for themselves and thus put them in a better place when adulthood and its associated responsibilities come around.

Read More: How to Teach Your Child About Managing Finance

4 Simple Steps to Start Building Good Credit

good credit score

Encourage them to find a job

First things, first: Your teenager will need a job. Good credit for teenagers requires consistent income, and most banks insist on seeing proof of employment when anyone above a certain age applies for a card. Furthermore, U.S. law dictates anyone under 21 demonstrate their ability to repay a credit card before they can open an account.

Not only will having a job improve the likelihood of your teenager being approved for a credit card, it will also set a precedent for healthy spending. Discovering how fast money can go when it’s money you earned is a brutal lesson to learn — but it’s best to learn it quickly and under the supervision of parents who can help in emergency situations. Plus, we all tend to be a bit more responsible money that’s earned.

Teach them good habits

On that note, good spending habits don’t come naturally to everyone. As you guide your teenager through the often-confusing world of credit, remind them that good credit comes down to one simple idea: Spend responsibly.


Teach them the importance of only spending money they have. Show them an interest fee chart to scare them away from acquiring unnecessary debt. Set an example by practicing responsible spending yourself. Whichever methods you use, try and keep tabs on their first couple months of credit card use to ensure that they understand the expectations you’ve set.

Have them open one credit card

As teenagers get older, they will be inundated with credit card offers from every angle. Keep them from falling into the all-too-common rabbit hole of having 13 different accounts that inevitably become lost in their wallets.

Start your teenager with one credit card. That means one card to keep track of, one monthly payment to make, and one website on which to see their transactions. Which card they apply for is up to you, however. Some experts suggest a retail card to a store your teenager frequents — just be cautious of excess shopping and high interest rates. Others recommend offering your teenager a joint credit card tied to your account to really keep track of it.

Check your teenager’s credit responsibly

As you venture through this educational and financial journey with your teen, be sure to check their credit reports and FICO Score regularly.

A credit report is what lenders, landlords, etc. use to determine a person’s credit worthiness. It’s compiled by three major credit reporting bureaus, each of which collects information about consumers’ personal details and their bill-paying habits to create a unique credit report, according to Investopedia. Checking you and your teenager’s report with all three bureaus each year will help you keep track of where your credit stands and will help you catch any fraudulent behavior.

Similarly, your FICO Score can also help you monitor your financial well-being. It’s based on a 300 to 850 range and it helps determine your ability to get a loan and what rate it will have. Basically, the higher the credit score, the better financing options and rates you have.


Keeping track of both will keep your teenager on the right track to good credit.