NEW YORK CITY, NY / ACCESS Newswire / September 29, 2025 / Credit scores play a significant role in a person's ability to qualify for loans and credit cards. A higher credit score can open up new loan opportunities and help secure lower interest rates and better loan terms. For many people, loans are essential to get a car, go to school, buy a home, and other important financial milestones. That's why it's essential that everybody knows how to build credit.

Building good credit doesn't happen overnight, which is one of the key reasons why it's important to start early. Parents can help teenagers start building credit to set them up for a brighter financial future. These steps will help.

Start early

Credit history is one of the most important factors in calculating a credit score. The longer track record an individual has of making on-time loan and credit card payments, the stronger their credit score is likely to be. As such, the earlier one starts, the better.

There's a secondary benefit of starting to build credit early, too: Good financial habits can be harder to build when someone is an adult. Teenagers who learn how to make payments and responsibly use credit cards may be in a better position to maintain good financial habits when they're older.

Teach the basics

Building credit takes time, and it can feel overwhelming for individuals who don't already have some financial knowledge. Teens can better understand how to build credit if they learn some basic financial practices first. Some good things to know include:

• The difference between debit and credit: Debit cards are connected to a bank account with a finite amount in the account. When one spends this money, it's gone. Credit cards have a maximum approved amount, but it's not tied to a specific balance. When someone spends credit, they have to pay it back before it incurs interest charges.

• How credit scores are calculated: FICO® scores are calculated using payment history (35% of the score), credit utilization (30%), credit history (15%), amounts owed (10%), and credit mix (10%).

• How to check a credit report: Anyone can check their credit report once a week at each of the three major credit bureaus: Equifax, Experian, and TransUnion. Use AnnualCreditReport.com to get started.

Add a teen as a credit card authorized user

Fiscally responsible parents should consider adding their teens as authorized users for their credit cards. As long as parents make on-time payments and use credit responsibly, all authorized users on the card will see a positive impact on their credit scores. While secondary users don't receive as big a bump as primary users, this can nonetheless be a good way to help teens start building credit without putting them on the hook for managing their own credit.

Consider a secured card

Most credit cards are unsecured, meaning they do not require any collateral. An unsecured card is almost like the training wheel version. With a secured card, teens 18 years of age or older may apply for a secured card that uses a cash deposit to set a credit limit for the card. Teens can use the card and pay it back like any other card. If they fail to do so, the credit card company may use the cash deposited as collateral to cover what is owed. Teens can grow their credit scores if they manage secured cards responsibly. But just like with unsecured cards, late and missed payments will hurt their scores.

Disclaimer: This content is sponsored by myFICO and is provided for informational purposes only. The information shared here is not intended to serve as financial, legal, or credit-related advice. Readers are encouraged to consult with their personal financial advisors or credit professionals to assess their specific situation. To learn more about myFICO's services, including credit scores and monitoring tools, please visit the myFICO website or reach out to a myFICO representative.

CONTACT:
Sonakshi Murze
Manager
sonakshi.murze@iquanti.com

SOURCE: iQuanti