It was once said that the youth is the hope for the future. Of course, this means that it is important for children and teenagers to be financially knowledgeable about the world of finances. No doubt, this adulting aspect of life may seem daunting, but it’s crucial for youngsters to have a reliable financial foundation. 

In order to be able to manage money well, having a good credit score is a fundamental need. So when the time is right, you would be able to reap the benefits of building your credit score early on. These include saving from different insurances, having several housing options, being validated for higher credit limits, and getting approved for lower interest rates on credit cards. So, here’s your one stop answer on how to increase your credit score early on!

Know the Requirements

It may seem like a race to get a good credit score at such an early age, but you have to remember that one of the main requirements in getting a credit card is having a job. A steady income is needed by law for credit card issuers to give you a card if you are under the age of 21. And no, an allowance does not count, so how will you be able to build your credit score then? 

1. Start a Savings or Checking Account

Beginning with an impressive banking history is a good step to having a good credit store and sturdy financial foundation. You must also be familiarized with regularly depositing money into your account.

If you’re a teenager who plans to open a checking account, you have to plan your spending intelligently to avoid debit card charges and overdrafts. 

Overdrafts are when the bank allows you to borrow money through your account by giving more money than what you have. These should only be used in case of emergencies or for short-term borrowing. 

2. Learn How Credit Cards Work

Before charging into the unknown, you must be ready. Do you handle your income or allowance well? Are you responsible with how you meet deadlines? Do you manage your account well? Do you avoid overdrafts on your own? 

You have to be aware of all the important information about credit cards and be responsible enough to handle one. This includes knowing that your credit card balance should be paid immediately. This would help you reach a good credit score faster.

3. Try to Get a Job

If you’re a teenager, you can try to get a job already. This would help you become more experienced in financial management so you would know the value of money. Plus, being able to stay employed reflects well on your responsibility and you would be better at saving money because you know how hard it is to earn. 

Taking on a job may also help you learn more about how credit cards work, especially if you encounter them on a daily basis. Moreover, being around adults also helps you learn better money managing strategies firsthand. 

4. Ask Your Parents to Put Your Name on a Household Bill

One of the most common things to help you earn credit score brownie points for your credit score check is paying for bills. By asking your parents to let you pay at least one household bill, you are able to look more responsible. It also helps you build a payment record. 

You can also be added as the authorized user on your parent’s credit card. This would allow them to train you with better spending habits. All your purchases and payments recorded under this credit card would also be listed on your very own credit report. But, what allows you to have a free credit score is that you’re not legally responsible for any debt it may get.

5. Check Out Available Credit Cards

Fear not, as there is yet another way for you to gain a free credit score. This is in line with the notion that you can build credit alone, without involving your parents. While it may sound challenging, it is not totally impossible. You may start by asking help from your parents to apply for credit at a bank and/or credit union where they have a checking account. 

Some cards available for kids and teens include: 

• Retail credit card

It is a lone credit card option that children and teenagers can use. It has limited purposes that accept little to no credit history, with credit limits held at 300 to 500 US dollars only. The only downside is that these cards have high-interest rates. So, you must pay the balance in full monthly to avoid big charges. You must also avoid being tempted by shopping crazes.

• Secured credit card

Having a secured credit card can be another choice for you. It is like a credit card except that it needs a security deposit against the credit limit. These cards let you deposit a small amount of 200 US dollars. This option can be used along with being an authorized user of your parent’s credit card. 

There are a lot of ways to get a good credit score up and running, but the main thing you need to remember is responsibility! Don’t forget to manage your money wisely so you can enjoy its benefits early!