The Basics of Building Credit

When can I start building my credit?

Unfortunately, you won’t technically be able to build your credit until you turn 18. With this in mind, there are things you can do now to start developing good habits for the future. If you learn how to manage your money and your accounts correctly, you won’t have to worry about credit card debt in the future. Here are some ideas to keep in mind:

– Practice with a prepaid card or debit card. You can buy one of these if you’re 13 or older, as long as you have your parent’s permission. With a prepaid card, you put a certain amount of money on the card, and that acts as your spending limit. If you have a bank account, you could also ask your parents to get you a debit card to use. Then you can monitor your spending on the card, pretending there are fees associated with it. Take this seriously, and you’ll feel like you own a real credit card!

– Learn about different forms of credit and the fees associated with them. Think about this as research for what’s to come. Check out some of the different loans and credit cards you might get when you’re an adult. You’ll soon know what to look for and what to avoid, which will hopefully help you make better decisions in the future.

– Help your parents monitor their credit. If your parents will allow you to see their credit reports and scores, take up the opportunity! This may show you more than you need to know about their finances, but at least you’ll get to see what credit is really like. If you can’t look at your parents’ credit, ask them questions about how their credit scores have changed over the years. Find out why they changed the way they did, and make note of any mistakes to watch out for.

– Live on a budget. If you’re one of those lucky kids that gets anything he or she wants from his or her parents, stop taking advantage of that. Instead, take your allowance and put it away for safe keeping. Put yourself on a budget and actually stick to it. Sure, these are adult problems, not middle school problems. That doesn’t mean you can’t grow up just a little bit right now.

For the most part, you just have to learn how to spend money responsibly. If you can do that, you will naturally build good credit when you’re 18.

Good luck!