College  |  May 13, 2019  |  Winnie Sun

Everything high school students need to know about building credit

What you'll learn
  • What credit is
  • How to build it
  • How parents can help

As a financial advisor, I work with clients every day who want to coach their kids to become financially savvy. One important topic is credit, especially for high schoolers. Here are my top tips for teens who want to build their credit.

What is credit?

Let’s start with some definitions. Credit is what allows you to buy something today knowing that you're going to have to pay it back later. Your credit score is a three-digit number that evaluates how likely you'll be able to pay back a loan or a credit card.

A great credit score can come in handy when it's time to take out a loan for college, a car, or home later on in life. Even if you can't get your own credit card quite yet, there are five ways teens can start building credit right now.

How to start building credit

First, learn the components of your credit report and really get comfortable with maintaining a good rating.

A secured credit card allows you to make a cash deposit, which then serves as your credit line. Let's assume you put $500 in the account. You can then charge up to $500. Make a plan for expenses you'd like to charge on the card, such as gas or movie tickets. Just make sure you pay your balance in full every single month before the due date.

If you have a parent or relative with good credit, ask if you could become an authorized user on their credit card.

The three national credit bureaus (Equifax, Experian and TransUnion), all have their own reports on you and each of the reports can be slightly different. So, review all three of them at least once every year.

Finally, talk to your parents about their credit. Have them explain what they're doing right. What pitfalls to avoid and what they look for when reviewing their own credit reports.

It’s never too early to get financially savvy

Building credit while you're still in high school is not just a smart idea, but an easy one too. The sooner you understand what it is, how it works, and why it's important, the sooner you can become financially prepared for the future.


Sallie Mae does not provide, and these materials are not meant to convey, financial, tax, or legal advice. Sallie Mae makes no claims about the accuracy or adequacy of this information. These materials may not reflect Sallie Mae’s view or endorsement. Consult your own attorney or tax advisor about your specific circumstances. Reproduction without explicit permission is prohibited.