How to Build a Credit History for Teenagers
It's never too early to begin building a good credit history. And many lenders and credit card companies are prepared to help teenagers establish a credit rating. Many different options are available, but familiarize yourself with the credit approval process before submitting your application for credit.
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Instructions
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Retain copies of your income stubs so you'll have proof of income.
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Open a checking or savings account with a bank and keep the monthly statements.
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Build your savings by depositing a certain amount from each paycheck into your bank account. Down payments and deposits are beneficial when applying for credit with no credit history.
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Talk with a representative from your bank about your credit card options. Some financial institutions offer secured credit cards (which require a deposit) to help consumers build a credit history.
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Tips & Warnings
Obtain a cellular phone plan in your name to practice paying bills and managing funds.
Apply for a department or retail store charge card, or obtain credit from a credit union. These types of accounts are easier to obtain than major credit cards.
Research or visit dealerships and apply for an auto loan with companies that offer "fresh start" or "no credit" auto loans.
Improve your chances of acquiring a loan or credit card by asking someone with an established credit history, such as a parent or older sibling, to co-sign or become a joint applicant on your account.
Limit credit inquiries. Applying for too many credit cards or loans can hurt your credit rating.
Co-signers and joint applicants become responsible for loan and credit card payments if the primary account holder is unable to meet the financial obligation.
References
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