Smart Money Moves For Teens

Credit cards used to intimidate me because of all the terms related to it. I was lost on how to start, increase my credit score, etc. I applied to my first credit card when I had a part-time job which is the first thing I recommend. 

HAVE A JOB FIRST. You want to start making some type of income before you start considering credit. Credit card companies require income information so they know you are able to pay your bills. Especially because you are younger, they don't trust you yet because you are have no credit history. 

DO NOT APPLY TO STORE CARDS WHEN NEW. I made the mistake of applying to a store credit card within 2 months of receiving my first credit card. Obviously, the application was denied because I had a very short credit history. So, wait it out! 

ALWAYS REMEMBER TO PAY BILLS ON TIME. Set up monthly reminders of when your credit card payment is due so you don't miss one. This is crucial to having a great credit score.

APPLY TO NEW CARDS EVERY 4-6 MONTHS. After making that store card mistake, I educated myself more on credit cards through articles. I started using this tip in particular and it has been successful. Keep in mind that every time you apply to a credit card it "pulls" your credit score (hard Inquiry) which temporarily lowers your score. It is not good to have too many hard inquiries either so make sure the cards you are applying are likely to approve you. I use Credit Karma for this, read more about it HERE.

BE AN AUTHORIZED USER. One thing I noticed about my score was that even though it was a great score it was quite steady for a couple of months. I was making payments on time, limited myself on the number of inquiries, using the tip above, yet one thing affecting my score negatively was the length of my credit history. Since I am still considered young to credit, I became an authorized user for one of my parent's credit cards. Make sure you talk about this thoroughly with the credit card owner because your name will be positively or negatively affected by how well credit is managed. This method will increase the average age of your accounts which will therefore increase your score!