Amazing credit building tips for 2020 – How to start being a teen

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People normally start building their credit with a disadvantage. Initially, there’s no credit in their pocket, so they’ll use credit to build credit, and with no substantial credit history. But initially, it’s quite hard to get loans or get approved for credit cards….. If you’re under 18 and have zero credit history. You can’t even legally get a credit card in your name.

But here I am sharing with you some amazing credit building tips that might help you to build credit even if you are below 18. Let’s start building good credit and learn how to maintain it properly.

1. Find a job

Getting a job isn’t directly helpful for building credit. But being employed and earning money is important in qualifying for credit. With long experience in your workplace, your chances are greater to grab a better, higher-paying job in the future. So, it is better to get a job as early as you can.

As per the CARD Act of 2009, students and teenagers, who can show their affordability to repay debts before, can open a credit card account. Having a job will help you with that. When credit card companies find that you have a decent job with a long work history, you are more likely to get a credit card.

2. Start with a checking account

A checkbook isn’t as attractive as you can swipe your credit card. However, somewhere down the line, you know that it can be a great way to learn the basics of budgeting. Teenagers should start with a checking account and a debit card. Keep practicing to become frugal and then use a credit card.

Many banks and credit unions may offer you “minor” or “student” checking accounts. The accounts are offered with lower fees than normal accounts. You may add a debit card to the checking account if your parents feel that you are prepared to handle it.

3. Prepare a budget

You, being a teenager, must learn how to create a budget. It is a very simple method; all you have to do is to prepare a strategy for how to allocate money that is coming. You should also keep in mind that tracking your spending is necessary. This will help you to compare what your budget was and what you have spent every week or month.

4. Being a co-signer

Federal legislation now requires anyone aged 18 or under to have a parent or guardian co-sign their credit card application. If you are now in your teenage years and below 18, ask your parents to be your co-signer. The catch is your parents will also be responsible for people paying off bills.

It is better if both you and your parents trust each other. And it is your duty as a teenager to use and pay the bills responsibly.

5.Get a secure credit card

To build credit as a teenager, kids have another good option – getting a secured credit card. Such a card will need a security deposit which is practically the credit limit of the card. For example, a security deposit of $1000 means you have a credit limit of $1000 to use. This secured credit card can be used as a normal credit card to make payments and improve credit scores.

It’s much easier to qualify for a secured credit card. If you use it responsibly, it can help you to build good credit. Card providers might even increase your credit limit or offer you an unsecured credit card after a while if you use the card responsibly

6. Get a prepaid debit card

It’s not a credit card, but it may act like one. A prepaid debit card will provide teenagers with the ultimate risk-free experience of using a card. As the name says, you have to pay before using the card; your funds will be stored in the debit card account as a deposit, which is practically your spending limit.

A prepaid debit card might charge fees to maintain the account. Prepaid cards also don’t report the user’s spending activity to credit bureaus. They also do not impact your credit score. That’s why it is not helpful for building credit for teens. But, these cards are good for teenagers who have a tendency to overspend. Before using an actual credit card, those teenagers should practice how to use a card responsibly. Prepaid debit cards can help teenagers to control their spending and live within the limit.

7. Set guidelines for credit card use

Using credit cards requires responsibility and proper guidance. It is a long-term responsibility necessary to build and maintain your good credit. So, to build credit, you must set up a few guidelines to use credit cards responsibly. Pay your bills on time, carry a low balance, and pay off your balance in full. Decide on a cap for how much your teen kid spends each month and how you’ll monitor that. Ask your teen to keep a calendar of credit card payment deadlines and try to make his/her payment at least a week before to avoid late fees.


Do your best not to carry a balance on the card. If you carry a balance and make only the minimum monthly payment, it can take decades or more to pay off the debt,” suggested David Levy, Editor at Edvisors Network. “Late payments result in late fees, and some credit card issuers will increase your interest rate if you’re late with a payment. Making payments on time will help you build a good credit history.”