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How To Help Your Teen Build Credit

June 30th 2016 by
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Parents tend to believe that the best time to help their children start to build credit is after college.  However, the best time may be when they are still in high school – experts recommend junior year is actually a good time to start.  Take a look at these tips to see how you can help your child build credit to put them ahead of the game.

Starting Out

The first step to helping your child build credit is by walking them through the basics.  Start having conversations about credit when your children as early as possible and continue to build upon the conversation as the years go on.  The most important aspect when doing this is not to make assumptions that your child understands the basics.  Be sure to stress the importance of making payments on time and the risk of debt if responsibility is not maintained.

Give Them Some Freedom

Allow your teen to use a credit card that you monitor.  As of 2009, a teenager can no longer apply for a credit card by themselves and in order to obtain one now, they must: use their parents’ accounts, have parents co-sign when they apply, establish a relationship with a bank that comes with a credit card or apply for a secured credit card.  These measures will allow your child to practice keeping charges low, paying in full and sending payments on time.

Have Them Keep Memberships

Many teenagers will find it’s fairly easy to apply for a gym membership.  However, if your child does not follow the correct cancellation policies after signing a contract, their credit can take a hit.  Teach your child to pay attention to the fine print of the contracts they sign and not to rush into any memberships before fully taking them into consideration.

Reconsider New Cell Phone Providers

Cell phone providers also make it easy to enroll, but cell phone providers do check the credit of their applicants.  If your teen only has a small amount of credit or low credit, you may want to convince them to prolong switching providers since their credit that is pulled can affect their ability to get more credit later on.

Offer Reminders

Be sure to remind your child that credit is long -term and that closing a credit line with a lot of history can impact their credit negatively, especially if they have significant debt.  Remind your child that keeping credit lines demonstrates a long and well-earned credit history.

Help your child to build credit early so they reap the benefits later in life!


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