TENCU Chronicles

Teaching your teen about credit is like handing them the keys to a car—it’s exciting, a little scary, and it comes with rules for safe driving. Good credit opens doors to better loan rates, easier apartment applications, and even job opportunities. But bad credit can slam those doors shut.

Here’s how to guide your teen toward building credit correctly—without any unnecessary detours.

Six Steps for Success

1. Start with a Credit Conversation

Before diving into accounts or cards, ensure your teen understands what credit is and why it matters.

• • • Explain how credit scores work (payment history, utilization, etc.).
    • Share examples of how good credit can save money in the long run.
    • Talk openly about mistakes to avoid—like overspending or missing payments

2. Add Them as an Authorized User

One of the safest first steps is adding your teen as an authorized user on your credit card.

• • • They’ll benefit from your positive payment history.
    • You can monitor their spending and set limits.
    • It helps them establish a credit history without full responsibility for the account.

3. Introduce a Starter Credit Card or Secured Card

If your teen is 18 and ready, consider helping them apply for a starter or secured credit card.

• • • A secured card requires a deposit, lowering risk.
    • Please encourage them to use it for small, regular purchases (like gas or streaming services).
    • Stress the importance of paying the balance in full each month.

4. Set Clear Spending Rules

Boundaries are key! Discuss what the card should be used for and how much they can charge.

• • • Link payments to a checking account so they can pay immediately.
    • Use online banking or mobile alerts for real-time spending updates.

5. Teach the Magic of Paying on Time (and in Full)

Payment history makes up the most significant chunk of a credit score. Show your teen that paying on time and in full protects them from interest charges and keeps their score healthy.

6. Monitor and Celebrate Progress

Check your teen’s credit score together every few months.

• • • Use free credit monitoring tools to track growth.
    • Celebrate milestones, like moving from “fair” to “good” credit.

Ready to start your teens financial journey? Open a Teen Debit Account

Helping your teen build credit is one of the best financial gifts you can give. With the proper guidance, they can enter adulthood ready to handle money like a pro—and with a credit score that opens doors.