What age can you start building credit, and how would you do it? Specific help with building your teen’s credit.
At what age can you start building credit?
This is a question that used to basically not exist when I was a teen. In fact, the only reason why I started establishing credit in my early-mid 20s was because I had taken out student loans.
But we’re sort of in a different world than when I was a teen.
Now, your credit score and credit report routinely get pulled by:
- Potential employers (credit history/report only, not your credit score)
- Your new landlord
- Your insurance company
- Utility service providers
- If you want a car loan
- Before you can get approved for your first credit card
Having a good credit score and positive credit history is becoming more and more essential. If your teenager is going to be heading straight into the “real world” – meaning, they’ll be getting their first apartment and starting a full-time job right after graduating high school – then helping them establish some credit now might be a good strategy.
Let’s dive into what age they can get a credit card, how to build credit early, and other bits you should probably know.
How Old do You have to be to get a Credit Card?
According to the Credit Card Act passed in 2009, your teen must be at least 21 years old to get a credit card by themselves. Even a student credit card.
Except, if they either get a cosigner over the age of 21 or submit a written application that shows they have “independent means to make the minimum periodic payment on the debt based on the terms and conditions of the loan”.
That enables young adults to get a credit card at 18.
Your teen can verify income using docs like:
- a pay stub
- tax returns
- commission checks
- investment statements
So, the youngest a person can get a credit card is 18, and in most cases, not until they are 21 years of age.
Wondering how it is, then, that a young person can start building credit? Keep reading.
Can a Minor Have a Credit Score? What about a Credit Report?
You may be surprised to learn – as I was – that a minor can have a credit score and credit report.
Especially since we now know that they cannot open a credit card until at least 18 years of age, and likely, until they’re 21.
But it does happen in a few very specific circumstances:
- Your child is listed as an authorized user on your credit card account
- Your child is a victim of identity theft (and the person is using the child’s information to open credit accounts and obtain a loan)
- Your child created a store credit card with their name but falsified other information on the application
Remember that a credit score is different from a credit report (and your credit report will not have your score on it). A credit report lists out the history and current information on your credit usage, on-time payments (or late payments) and loan history. Your credit score is calculated using information from the credit report.
You can find out if your own child has a credit report – and what it says – in two ways:
- Over the age of 13: You can request any credit reports through your child for free using AnnualCreditReport.com, once every 12 months.
- Under the age of 13: You’ll need to fill out forms and mail in specific documents for each of the three major credit bureaus – TransUnion, Equifax, and Experian.
Also, note that the Federal Trade Commission (FTC) recommends that you pull your child’s credit report by the age of 16. That way, you can see if there are any red flags and address them before they interfere with their young adult finances.
How to Build Credit Early – Can You Start Building Credit at 16?
Since a teen cannot get their own credit card, you might be wondering, how are they supposed to start building their credit early?
Glad you asked.
There are three ways your teen can build their credit early:
- Opening a Family Cash Card through Greenlight. Family Cash Card is a credit card for parents and their teens. Teens can use their cards to build credit before 18. And the whole family can earn up to 3% cash back (depending on how much is spent each month) on every purchase with the option to auto-invest for college.
- Adding a minor as an authorized user to your credit card (most cards allow authorized users as young as 13 – see the next section for more info).
- Taking out a credit-builder loan (they must be at least 18)
How Old do You have to be to be an Authorized User on a Credit Card?
Did you know that adding your teen as an authorized user doesn’t mean they actually have to use the card to start building credit?
You don’t even need to give your teen the card in order for them to start establishing credit.
#mindblown.
Adding your teen as an authorized user means they get their own separate credit card with their name on it, that is directly tied to your credit card account. Their credit report or credit score is not pulled when considering whether or not they get approved.
And that’s because you are 100% financially responsible for anything that they do with the card (not all credit card issuers allow authorized users to make payments, for example).
Hint: some credit card issuers allow you to put a spending limit on an authorized user’s card, so definitely ask about this.
Not only that, but both of your credit scores can be affected by each other. Meaning, an authorized user’s credit score can actually increase OR decrease, depending on the primary cardholder’s account management (and vice versa).
Sometimes, parents get perks for adding an authorized user. For example, recently, Amex cardholders were given 20,000 bonus points when they added an authorized user.
| Credit Card Issuer | Minimum Age Requirement for Authorized User | Do they report authorized user activity to credit bureaus?* |
|---|---|---|
| American Express | 13 | yes |
| Bank of America | No minimum age requirement | yes |
| Barclays | 13 | yes |
| Capital One | TBA | TBA |
| Chase | No minimum age requirement | yes |
| Citi | No minimum age requirement (except for the Costco credit card, with a minimum age requirement of 18) | yes |
| Discover | 15 | yes |
| U.S. Bank | No minimum age requirement | yes |
| Wells Fargo | No minimum age requirement | yes |
*you want to check the specific reporting of each credit card issuer, as some only report for certain ages. For example, Chase and Wells Fargo only report information for authorized users if they’re 18 or older.
How Old do You have to be to get a Credit Card with a Parent?
Your teenager can get a credit card with a parent in three different ways:
- Authorized User on a parent’s card
- Card of their own with their parent as the Cosigner
- Joint Account Holder with the Parent
The minimum age requirements to become an authorized user are listed in the section above.
To get a card of their own with a cosigner, or to be a joint account holder, a teenager has to be at least 18 years old.
Will a Prepaid Debit Card Build Credit for My Teen?
You’ve likely seen prepaid debit cards for teens.
If not, my reviews are:
While these can make great solutions for your household money system, and to teach kids/teens about plastic, you should know that they will not help your child establish a credit history.
Psst: here's a hybrid strategy for how to use both a Prepaid Debit Card and a credit card (as an authorized user).
In summary, your child can start building credit as a teen, so long as you allow them to be an authorized user on your credit card, your credit history is good, and that credit card issuer reports the information to the credit bureaus (for people of their age range). If you’re still unsure, then you’ll want to call the number on the back of your credit card and ask them these questions specifically.
Amanda L. Grossman
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