1. Add Them as an Authorized User
The easiest first step is to add your teen as an authorized user on a card you already manage well. After you add them, your account’s payment history and age may appear on their credit file, giving them a record before they can qualify on their own. That early start matters because length of credit history accounts for 15 percent of a FICO® Score.
Call your issuer first to confirm they report authorized users to the credit bureaus, since some only begin reporting once the teen turns 18.
2. Let Them Practice
Share in the use of the authorized credit card. This not only helps them build credit, but it can help them understand what it means to use it responsibly. Let your teen know that the amount of credit they use each month carries significant weight in a credit score, second only to paying on time.
Instruct them to keep the balance well below the limit, even when they could spend more. A card used for one small purchase and paid off in full looks far healthier than one pushed close to the credit limit.
Show them how to check the balance in the issuer’s app regularly, not just after they’ve spent money.
3. Open a Secured Card
A secured card is the common next step once your teen turns 18 and has income from a part-time job. They put down a refundable deposit that becomes the credit limit, then use the card for small, regular purchases. Lenders treat a secured card like any other, so on-time payments report to the bureaus and build history in the teen’s own name.
Have them charge one predictable expense, like a streaming plan, and pay it in full every month. The goal is steady activity, not a high limit.
4. Try a Credit-Builder Loan
If your teen is at least 18, a credit-builder loan is another way to demonstrate responsible credit use. While details vary by lender, the loan typically holds the borrowed amount in a savings account while your teen makes fixed monthly payments. Their payment activity is reported to the credit bureaus. At the end of the repayment term, the teen gets the saved money back, having built a record of on-time payments and some savings.
Consider pairing it with their first checking account so payments can be made automatically each month.
5. Check Credit Reports Together
Once your teen has credit activity, make checking their credit report a shared habit. Everyone is entitled to a free report from each bureau at AnnualCreditReport.com. And better yet, HawaiiUSA members with Digital Banking gain access to credit monitoring and their credit score at no cost in My Credit Score. Reviewing it together helps them see how those habits show up on their report. You’re also scanning for errors or signs that someone has used your child’s information, a problem that’s far easier to fix when caught early.
Request the report together each year and review what each line means. As they head to college or their first apartment, that yearly check becomes a habit they continue on their own. They leave home knowing how to read the record they’ve built.
HawaiiUSA can help you set up the accounts that build your teen’s credit. Contact us to get started today!
