In this blog post, we’ll discuss at what age you should start building credit as well as when and how you should start working on building your teens’ financial futures.
Building credit in your teen years, while it takes some time and effort to earn a score that will be favorable when the need for borrowing comes up, can pay off in significant ways. This represents your first chance to begin building credit.
At What Age Can You Start Building Credit as a Child?
What is Credit?
Credit is the concept of borrowing money to pay for goods or services today with the implicit understanding you will repay it later—usually with interest.
What is a Credit Score?
Your credit score represents a single measure of your overall creditworthiness, though the models used vary.
What Goes into a Credit Score?
1. Timely Payments 2. Credit Utilization Ratio 3. Credit History 4. Credit Diversity (Mix of Credit Lines) 5. New Attempts to Access Credit (Inquiries)
What is a Credit Report?
A credit report is a statement which presents all the information pertaining to your credit activity, including past loan payment history as well as current credit accounts which you pay.