Blogging for Change

How do I help my teenager begin to establish good credit?

by Jesse Campbell on
3/19/2014
in Personal Finance

Ask the Experts: How can I help my teenager begin to establish good credit?

“What can I do for my 15 year old to help start establishing her credit history?” –Robert

Hi Robert,

That’s a great question and this is a great time to start thinking about building your daughter’s relationship with credit.

The first steps are:

  1. Education
  2. Education
  3. Education

Don’t attempt to build your daughter’s credit history for her; build it with her. Talk about how credit works and explain how you use credit. Help her understand how to safely and smartly use credit to establish her creditworthiness. Give her the knowledge she needs to make smart choices on her own. If you need help, check out our eBook Getting the Credit You Deserve. It’s got answers to (nearly) every question you could have about credit.

Aside from education, the first step is usually helping your child open both a checking and a savings account. Both should be used responsibly – they need to avoid doing things like over-drafting either account. The accounts in and of themselves won’t impact her future credit reports and credit scores, but building a positive relationship with a bank will make opening her first credit card that much easier.

Next, you can help her open a credit card account. She won’t be able to do this on her own prior to turning 18, but you can do one of two things: you can co-sign on a credit card with her or you can make her an authorized user on a card in your name. Either option will help her establish her credit identity and both options put you on the hook if she misuses the card in some way. Once she’s 18 she can open an account in her own name. You should definitely shop around for the best available terms, but don’t forget to start your search at the bank where she’s been maintaining her checking and savings accounts. If you're having difficulty opening a regular credit account, consider opening a secured credit card to start out.

From there it’s just a matter of using credit wisely – avoiding missed payments, maxed out accounts, charge offs and other pitfalls.

Good luck!

Jesse Campbell photo.

Jesse Campbell is the Content Manager at MMI, with over ten years of experience creating valuable educational materials that help families through everyday and extraordinary financial challenges.

Recommended Articles

Man sitting in front of pile of bills, trying to understand his options.
Professional Budget Advice
Make the most of every dollar and start building toward your dreams! Budget counseling is FREE and available 24/7.
Learn More
Learn more
  • Better Business Bureau A+ rating Better Business Bureau
    MMI is proud to have achieved an A+ rating from the Better Business Bureau (BBB), a nonprofit organization focused on promoting and improving marketplace trust. The BBB investigates charges of fraud against both consumers and businesses, sets standards for truthfulness in advertising, and evaluates the trustworthiness of businesses and charities, providing a score from A+ (highest) to F (lowest).
  • Financial Counseling Association of America Financial Counseling Association of America
    MMI is a proud member of the Financial Counseling Association of America (FCAA), a national association representing financial counseling companies that provide consumer credit counseling, housing counseling, student loan counseling, bankruptcy counseling, debt management, and various financial education services.
  • Trustpilot Trustpilot
    MMI is rated as “Excellent” (4.9/5) by reviewers on Trustpilot, a global, online consumer review platform dedicated to openness and transparency. Since 2007, Trustpilot has received over 116 million customer reviews for nearly 500,000 different websites and businesses. See what others are saying about the work we do.
  • Department of Housing and Urban Development - Equal Housing Opportunity Department of Housing and Urban Development
    MMI is certified by the U.S. Department of Housing and Urban Development (HUD) to provide consumer housing counseling. The mission of HUD is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD provides support services directly and through approved, local agencies like MMI.
  • Council on Accreditation Council On Accreditation
    MMI is proudly accredited by the Council on Accreditation (COA), an international, independent, nonprofit, human service accrediting organization. COA’s thorough, peer-reviewed accreditation process is designed to ensure that organizations like MMI are providing the highest standard of service and support for clients and employees alike.
  • National Foundation for Credit Counseling National Foundation for Credit Counseling
    MMI is a longstanding member of the National Foundation for Credit Counseling® (NFCC®), the nation’s largest nonprofit financial counseling organization. Founded in 1951, the NFCC’s mission is to promote financially responsible behavior and help member organizations like MMI deliver the highest-quality financial education and counseling services.