How to Build Credit as a Minor: The EARLY Strategy

Building credit as a minor, especially when you're 14, might seem like a distant dream. However, there are strategic steps you can take to set yourself up for financial success down the road.

Key Steps to Building Credit as a Minor

While minors are generally ineligible for traditional credit cards, there are still ways to establish a credit history. By adopting good financial habits and leveraging your parents' credit, you can start building a solid financial foundation early.

Learning Good Money Management Skills

The first step to building credit as a minor is to develop strong money management skills. Start by learning how to budget. Learn to live within your means and manage your finances responsibly. As you grow older, these skills will be invaluable.

The Role of Part-Time Employment

Consider getting a part-time job to earn some income. Earning your own income, even if it's just a small amount, can help you demonstrate financial responsibility. In the US, you can get a part-time job, but you may not get a credit card without showing that you have income of your own. Be prepared to show documentation of your earnings.

Becoming an Authorized User on a Family Credit Card

The best way to build credit as a minor is to have your parents or a responsible adult add you as an authorized user on one of their credit cards. This can be a powerful strategy to start building your credit score immediately. American Express, for example, allows someone as young as 12 or 13 to become an authorized user.

When you are added as an authorized user, you will benefit from the history and credit score of the primary cardholder. If the primary cardholder has a strong credit history and perfect payment history, your credit score will benefit significantly. Having your name on an authorized user account can provide a long credit history, which is a key factor in building a good credit score.

Choosing the Right Credit Card

When selecting a credit card to become an authorized user on, it's important to choose the right person. Pick someone who has a good or excellent credit score and a flawless payment history. You want to associate your credit with responsible financial behavior.

Timing and Patience

While you can start building your credit through an authorized user account, it's important to understand that your credit score won't start reflecting these actions right away. The process of building a credit history can take some time. When you turn 18, you will become eligible for your own credit card, and around six months later, your FICO Score will begin to be generated.

Conclusion

Building credit as a minor isn't impossible, but it requires patience and strategic planning. Start by learning good financial habits, and then consider becoming an authorized user on a family credit card. With the right approach, you can lay the groundwork for a solid financial future.

Keywords: credit building, authorized user, parental endorsement, credit score, budgeting