How to Get Credit for a Teenager
Credit is defined as payments that are deferred. Deferred means buying now and paying later. A creditor extends goods or services on terms and agreement of repayment that are legally binding. The debtor is the party that accrues or owes the debt. Credit scores are used to determine the credit worthiness of a party or an account holder. Read on to learn more.
- Difficulty:
- Moderately Easy
Instructions
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1
Be a co-signer. A co-signer is needed for minors to obtain credit. A co-signer is a person that agrees in writing to repay the debt if the borrower does not. The payments or failure to repay is reflected on the borrower's and the co-signer's credit reports.
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2
Establish a joint account with the teenager. To establish a joint account the parents add the teenager to their account. The credit history is reflected on both the teenager and parent account, debt applies to both.
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3
Open a checking account. Salaries from a part-time job or summer job can be direct deposited into a checking account. Regular deposits show responsibility.
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4
Start a saving account. Regular deposits with limited withdrawals can create a line of credit. A line of credit can be established by using a saving account as collateral.
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5
Join a credit union. Most credit unions have various banking programs for teenagers and young adults.
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6
Begin a Christmas Club account. A minimum amount of $20 dollars or less is required each month. Instead of withdrawing the full amount, spend half for Christmas presents and deposit the rest in a savings account.
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Tips & Warnings
Beware of credit card scams. Never accept a pre-approved credit offered via an email without a through investigation.
