Inside: Top credit tips for teens that will set them up for great credit.
Now that I am an adult, there are many things I wished I started sooner. One of those being building my credit! The credit world can be a super tricky one, filled with confusing rules and long term lessons to learn if you mess up. It’s a lot to handle!
It takes a while to build up really good credit, so if you are a teen who has big plans of going off to college or moving out…then it’s important that you start thinking about these things today.
It’s easy to shrug this responsibility off because you are underage, but there are many things that you can start doing right now to ensure that you have great credit when you need it. I have made a list of everything I have learned as a credit card owner for the past few years. So take a look at the tips below to get started!
Credit Tips for Teens To Build Credit Today
Alright, first up I have some obvious tips. Parents, if you are reading this…you can think of this first list as a checklist of things that you can do with and for your teen that will help them start to build their credit. This could even be a part of their summer bucket list ideas teens make for fun! Take a look!
1. Explain How Serious Credit Cards Are
This one isn’t so much as an actual credit tip, but I wanted to start out this list with it because it is very important. Credit cards can often feel like a lot of fun. It is potential money after all. They are easy to wrack up, and even harder to pay off.
So sit down with your teen and explain the dangers of frivolous spending. Then you can start some of the other ideas on this list to help them start to build their credit.
2. Never Spend Money You Don’t Have
This can be a part of the discussion that I mentioned above; it’s my tip number one. Do not spend money you don’t have. Of course, credit cards are for emergencies and should be used when needed. But if you are spending them on everyday things, make sure that you only spend the money you have.
This can actually be a great way to build credit while also gaining credit points. Most credit card companies will offer awesome credit point programs that will earn you money back when you spend. That’s free money, over time at least.
This is truly like the number questions game, but with higher stakes.
3. Find the Best Student Credit Card
There are many different cards out there that offer some great things, but what works for you is going to be very personal. So do some research with your teen right by your side to find the one that will fit them the best.
4. Credit Tips for Teens – Parents Can Co Sign
Parents can actually co sign on credit cards for their teen. This way, they can start building credit in their name, and not yours. If you want to just give them some practice for when they do need a credit card, you can always do an added line on your own account. But they won’t be building their credit this way.
5. Open Checking in their name
While you are at it, you may as well also open a checking account in their name. My mom did this for me when I was 16, right after I got my first job. This is a huge step and a very exciting one. This will give them the opportunity to get their banking in order before they turn of age.
6. Give them bills to pay
Obviously, you aren’t going to charge your child rent. But if they have little subscriptions that they enjoy using(like Spotify), then you can totally give those to them to take care of. If they don’t have a job and just have an allowance, this still works.
It will show them how real money is, and how quickly it can be spent. It also helps them to budget their money accordingly.
7. Have them pick one thing to use their card for
If they don’t want to start earning credit points and whatnot, then having them pick just one thing to use their credit card for a month/week is a great idea. This way, their credit card is still getting used, but you are staying under 30% of its usage, which is important.
8. Credit tips for teens – Only Use Less Than 30%
Speaking of only using 30% or less, it’s important that their usage is not higher than that amount. If it is, then your credit score will go down.
9. Get credit for monthly billed payments
If they have specific monthly payments that they make every single month without fail, document that. There are companies that can start building their credit off of things like that! This would be a good way to build credit without a credit card.
10. Only open one line of credit
It’s important that they only have one line of credit. Anything more and that can get pretty hard to juggle. Plus, when they are this early on in their credit building career, this can be super detrimental to their score. This is a no go!
More Credit Tips for Teens
Now that the big ones are over with, the rest of the list will be relatively simple. Below you will find some more awesome credit tips for teens that will truly be a game changer for them.
11. When applying for loans, only apply for short term ones
12. Pay off your card every month
13. Teach them proper saftey to stop fraud
14. Build a monthly budget
15. After time, ask for a card increase
16. Do Additional Credit Research to See New Tips
17. Give them examples of how quickly it can get out of hand
18. Only Make Small Purchases
19. Only use once a week
20. Leave Credit Card at home
Credit Tips for Teens To Instill Good Money Habits
Lastly, I wanted to include some credit tips for teens that will help them to gain good money habits while they are young. Learning to use money properly can be confusing and sometimes dangerous. I want to make sure that your teens are going to thrive from the jump!
21. Write Down every time you spend
22. Be Aware of Scams
23. Don’t underuse it
24. Keep track of your credit score
25. The Worst Way to Build Credit
26. The Best Way to Build Credit
27. Stay Strict
28. Stay Consistent
29. Stay Patient
Alright, there you have it. Some of the best credit tips for teens that can help them create great credit habits today. What is the use in waiting until you are 18 when you can start today?
Though it makes little sense to me, having a good credit score can truly open so many doors to young adults. It can help them rent houses, get cars, and eventually…they can buy their own house! The longer you have good credit, the better.
I hope you loved these tips and that you found them useful. Sometimes, having some short-term goals mixed along with the longer-term ones can be a great idea. If you are interested, check out this list of short term goals students will love.
Mom to teens with lots of ideas and inspiration to share for travel, food, parties, school & fun!