How to Establish Credit for a Teenager

Being financially responsible at a young age and building credit as a teenager can help you acquire mortgage loans and other types of financing in the future. Lenders carefully consider an applicant's credit history when deciding whether to approval a loan request. And individuals with a short credit history tend to pay higher rates. By establishing credit as a teenager, you'll create a credit file at an early age and build a solid rating.

Instructions

1

Maintain a bank account. Start managing and saving your money with a checking or savings account. Open an account with your local bank branch or credit union.

2

Apply for a credit card with your bank. Complete an application for a secured credit card with your personal bank. Provide a cash deposit to secure the credit card (between $300 and $500). Banks issue these types of credit cards to applicants with no credit history and bad credit.

3

Complete an application for a Federal student loan. Begin establishing credit as a teenager by applying for a student loan for college. You can obtain loans with no credit check.

4

Request a student credit card. Browse the halls of your college or university and pick up an application for a student credit card. These cards help students establish a credit history, and they tend to feature lower credit limits.

5

Apply for in-store credit. Retailers and department stores offer easy credit approvals, and these cards are easier to obtain than major credit cards like Discover, American Express, VISA and MasterCard. Submit an in-store application for a charge card.

6

Recognize good credit habits. Getting credit is only the first step. Establish a good history by paying your bills on time (on or before the due date). Only charge what you can afford to pay, and don't skip payments.

7

Become an authorized user. You can add your name and social security number to your parent's credit card and begin establishing credit. Ask your parents to call their credit card company and include your name on the account. You'll receive a card in your name, and your credit score increases each time they make an on-time payment.