How Young is Too Young to Build Credit?

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You can actually start building credit before you’re 18, but you’ll need a parent to help. A parent can add you as an authorized user to their credit card and start building your credit profile before you’re 18.

If you’re under 18 you should talk to your parents about your desire to start off on the right foot. Having a credit score at 18 can be intimidating as it will open a lot of doors and likely higher lending limits. However, if used properly it can set you up very well for personal finance success.

Best Ways to Build a Child’s (or Teens) Credit

A parent can start building their child’s credit by making them an authorized user on their credit card. Usually a person has to be 18 and have an income to take on credit, especially a credit card, but in this case being an authorized user is different.

An authorized user on a credit card allows you to benefit from the parent’s good credit history. They won’t have the same credit-building power but it will start to build their file. You don’t even need to have a card in your name.

The other way to start building at a young age, or even at 18, is for your parents or someone you know to cosign on a credit card or loan. This does come with a risk as you will now be responsible to pay back the debt, not your parents.

Types of ways to build credit young:

  • Get a secured credit card.
  • Take out a credit-builder loan.
  • Look into alternative credit cards such as jewelry, department store, etc.

Don’t Rush into Credit-Building Too Fast

Before you rush to start building credit before you’re 18 you’ll want to make sure you’re educated.

It’s worth it to understand credit scores and how to build credit the right way. However, before you dig into the world of credit you’ll want to start establishing a budget. By building a budget to fit your means you can ensure you’ll have enough money to pay your debts each month.

You’ll want to study the basics of earning, saving and spending. As a teenager it’s likely you’re not getting this knowledge in school so you’ll be left to resources like our website.

As soon so you’ve learned more about credit, dig into learning how to budget, the different budgeting methods and different budget percentages for your finances.

Signs You’re Ready to Build Credit

Typically you’re ready to start building credit and digging into finances when you’re able to drive and get your first job. If you’re struggling to find good starter jobs for teens you’ll want to review job boards, social media and even talk to your local companies and offer to volunteer.

A few signs you’re ready to focus on your credit:

  • You’re already digging into building credit and finances.
  • You understand how to build a budget, save and spend wisely.
  • You know the basics of money management and how basic credit building tactics work (ex: credit cards).
  • You are honest about your money and balance your wants and needs.
  • You’ve grown mature with your decision making.