Credit Building Tips for Teens


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Written by: Guest | Best Company Editorial Team

Last Updated: July 30th, 2020

Guest Post by Ethan Lichtenberg

The teen years are some of the best times of your life. With the freedom of getting your first car, driving your friends around, and not having serious responsibilities, your daily routine is full of excitement and opportunity. Yet there are some things that teens need to learn that can guide them for the rest of their lives.

One of those important life lessons in dealing with credit — credit cards, credit scores, and credit building. Even student loans can affect credit scores. These are all challenging but critical things that will lead you to have a successful future. Here are the best ways to build credit for teens of any age. 

Use a student credit card

Most banks offer a credit card for students with a low-interest rate and a low credit limit. The limit on these student credit cards can go as low as $200 in some cases. To some parents, it may seem like a horrible idea to give your teen access to a credit card, but it’s essential to learn good habits as soon as possible. 

Most student credit cards will be an extension of the parent’s banking accounts. This gives parents the power to control nearly everything. A student credit card can teach teens valuable lessons while building that credit up. Let’s be honest, having no credit can be worse than bad credit.

Learn good habits

As we’ve said, learning the best ways to handle money should be at the top of the list for parents of teenagers. Creating healthy habits when you’re a teen can lead to a profitable and secure financial life. A good trick for parents is to show your teen the ins and outs of credit. There is no wrong way to teach them if you also have good habits.

Show your teen when you use your credit card and how it may help in emergencies. Tell them that paying off the full balance each month is the best way to build the elusive perfect credit score. Twenty-five is the ideal age to know everything about financial stability, so the time to start teaching them is now. 

Make your teen an authorized user on your account

Almost every parent in the world has a checking account. If your teen has yet to make any strides in the financial area of life, making them an authorized user on your account can teach them the necessary things about spending wisely. Getting your teen’s name on an account, even if it’s not their own, will also build their credit. 

Building credit from scratch is tough, but giving your teen access to your account is the experts’ pick for creating credit. The best thing about making your teen an authorized user on an existing account is the ability to monitor their spending. You can see every penny they spend and every swipe they make. As a parent, you can then show them the correct way to spend and save wisely. 

Get a job (obviously)

Many teens do not know this, but merely having a job builds your credit. In today’s world, many teens do not work because of the popularity of sports and the focus on academics. However, getting a job, even if it’s a small job, can lead to building your credit score. Having a job teaches teens many things that will help them through life. 

First, the money they spend will be their own money — that changes things a lot. When you work hard for your money, spending it frivolously is not as likely. Second, it teaches teens that money does not just show up in your account. While building credit, having a job can also teach teens essential lessons of life. 

Open a savings or checking account 

The best way to build credit for teens is by opening a checking or savings account. Banks and the credit monitoring companies want to see you using money properly. If you turn 23 and have zero credit, you will struggle to find a reliable credit card. Using a checking account with a debit card is a perfect way to kickstart credit building. 

If you’re looking for something else, a secured credit card is a perfect way to build credit as well. Secured credit cards only have limits on how much you put down. If your teen needs to build credit, bring in a few hundred dollars and open a secured credit card. It is not a borrowed loan from the bank, so there are no penalties. The only limit is how much money you put on the secured card. 

Teenage boys walking

The bottom line

If you’re a teen looking to figure out how to spend money and build your credit for a bright future, these tips will lead you in the right direction. If you’re a parent trying to teach your teen healthy financial habits, these tips can help you stress less. Credit cards aren't something to fear, and they can be a great tool to get your finances straight.

Ethan Lichtenberg is a writer for and other top car insurance comparison sites. He enjoys reading Fredrik Backman and sneaking off to the beach every chance he gets.

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