• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

MomsWhoSave.com

Living Well. Shopping Smart. Family, deals, recipes, travel, reviews, home and decor, beauty, fashion, and much more!


More results...

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
  • home
  • all posts
  • lifestyle
    • parenting and family
    • health / self-care
    • home / diy / crafts
      • home
      • diy / crafts
    • personal finance / careers
    • pets
    • education
    • beauty / fashion
    • reviews & entertainment
      • reviews
      • entertainment
  • gift guides
    • all gift guides
    • amazon-exclusive gift guides
  • printables
  • recipes
    • entrees
    • side dishes
    • appetizers
    • desserts/treats/snacks
    • beverages / smoothies / popsicles
    • recipe roundups
    • seasonal / holiday recipes
    • misc. recipes + tips & techniques
  • travel
    • travel posts
    • search travel deals
  • deals
    • deals
    • daily deal sites
    • freebie list
    • freebie posts
    • free / frugal activities
    • store list
  • giveaways
  • blogger resources
  • about / pr
    • about
    • pr
    • privacy
    • disclosure policy
You are here: Home / personal finance / careers / Does Your Teen Know How Credit Scores Work? What to Teach Your Teen About Building Credit

Does Your Teen Know How Credit Scores Work? What to Teach Your Teen About Building Credit

By Teresa

Disclosure: Articles may contain affiliate links. As an Amazon Associate, we earn from qualifying purchases (at no additional cost to you). See our full disclosure here.

Last updated on February 3rd, 2024 at 08:03 pm

Ready to have that all-important talk with your teen? You know–the one about managing their money and building credit?

Does Your Teen Know How Credit Scores Work? What to Teach Your Teen About Building Credit

Your teen will always be your baby, but on the other hand, we all know they grow up fast. Itโ€™s only a matter of time before theyโ€™ll be on their way to adulthood and leaving home to start a new job, move in with friends, or attend school.ย 

Before that day comes, you need to make sure theyโ€™re prepared for the realities of becoming an adult, and that includes something that doesn’t get enough attention โ€” borrowing money and building credit.ย 

As a starting point, ask your teen, โ€œwhat affects your credit score?โ€ and see what they say. While they might know that credit cards and loans have an impact on this score, they probably donโ€™t know exactly how it all works or what they can do to build and maintain a good score.

And, letโ€™s face it,ย  you might not feel like an expert either! But donโ€™t worry, we’re going to get into what goes into that mysterious number called a credit score, and what makes it go up โ€” or down. Then, you and your teen can both feel more confident in managing your finances.ย 

Teach Your Teen About Building Credit

1. Paying on Time is Crucial

If you want to build your credit, start by paying your bills on time. Lenders and creditors will see this as an important indicator that you can handle your financial responsibilities. Making on-time payments plays a major role in determining your credit score.

2. A Variety of Credit Accounts Helps

There are various types of credit accounts, and each of them can impact your credit score in a different way. Having a good mix of credit cards, personal loans, and lines of credit is generally a smart idea. Thereโ€™s just one catch. Variety only looks good if you pay your bills on time, as it shows you can handle multiple payments at once.

On the flip side, having too many accounts in poor standing will hurt your score.

3. Be Cautious with New Credit Accounts

Credit scoring models consider how many new accounts you have and how many you’ve recently applied for or opened. Opening multiple accounts in a short period of time can be risky, as it suggests youโ€™ve increased the amount of bills youโ€™ll have to pay.

This is a move that could make lenders see you as a high-risk borrower–at least until you prove that you can juggle these accounts and maintain a positive payment history.ย 

Teach Your Teen About Building Credit

4. Age Matters When it Comes to Credit Accounts

Creditors like to see that you’ve been managing your credit responsibly over time. Having a long credit history with no red flags (like missed payments) may boost your credit score. Unfortunately, your teenager wonโ€™t be able to rely on this part of the calculation, since most lenders require teens to be 18 years of age before they can borrow money on their own.ย 

You might be able to help them build a good credit score earlier though by making them an authorized user on one of your credit cards. (That doesn’t mean you have to actually give them a card to use, by the way.)

5. Keep Your Balances in Check

Creditors prefer to see that you’re using only a small portion of the credit available to you. If you’re close to maxing out your credit cards, it can negatively affect your score. Keeping your credit card balances high tells prospective lenders that you’re probably carrying too much debt.

6. Watch out for Negative Marks

Certain things โ€” judgments, liens, foreclosures, bankruptcies, or delinquencies โ€” have the most detrimental impact on your credit score.

If you’ve faced financial difficulties and had to go through one of these situations, it may impact your credit score for several years. Having accounts sent to collections or sold to debt buyers may also negatively influence your credit score.ย 

And there you have it โ€” now you’re prepared (or at least better prepared) to talk to your teen about how to build a good credit score and what to watch out for. Sharing this information can help them make better borrowing choices so that they can start their financial futures off on the right foot.ย 

Also read:
Teaching Kids About Money โ€” 7 Smart Tips
How to Pay Off a Car Loan Faster + The Pros and Cons
Get Your Truly FREE Credit Report and Credit Score Online

You can find MomsWhoSave onย Facebook,ย Instagram,ย Pinterest, andย Twitter. Follow us to get our latest updates.

Donโ€™t miss a thing!ย Subscribe to MomsWhoSaveโ€™s newsletter.

Filed Under: personal finance / careers, parenting and family

Previous Post: « Score Big — The Best Way to Buy NFL Tickets
Next Post: Summer is Here! It’s Time to Visit Wetโ€™N Wild Emerald Pointe: Get Your Discount Code & Go Have Fun! »

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recipe Rating




This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

  • Amazon
  • Email
  • Etsy
  • Facebook
  • Instagram
  • Pinterest
  • Threads
  • TikTok
  • Twitter
  • YouTube

Amazon favorites

celebrate independence day

4th of July Patriotic Windsock Craft

4th of July Patriotic Windsock Craft

Make These Easy Patriotic-Themed Snacks: Red, White, and Blue Pretzel Bites

red white blue appetizers
MomsWhoSave bio

Footer

newsletter

SIGN UP for the latest news & updates!
Read our privacy policy.

follow along

  • Email
  • Facebook
  • Instagram
  • Pinterest
  • TikTok
  • Twitter
  • YouTube

Copyright MomsWhoSave © 2025 ยท Genesis Framework
Stock Photos provided by Depositphotos