You’ve probably heard someone say, “That’ll hurt your credit,” or “I’m trying to build my credit,” — but if you’re like most teens, you’re probably thinking: “Okay… what even is credit? And why should I care right now?”

Fair question. And here’s the truth: your credit will impact some of the biggest decisions in your life. Whether you want to rent an apartment, buy a car, take out student loans, or even apply for certain jobs — your credit score will follow you.

So even if you’re not old enough to open a credit card just yet, learning how credit works now gives you a major head start on adulting later.

So… What Is Credit?

Credit is the ability to borrow money and pay it back over time.

When someone lets you use their money — whether it’s a bank, a credit card company, or even a phone provider — that’s credit. And how well you handle that responsibility is tracked in something called a credit report, and summarized by your credit score.

Let’s break that down.

What’s a Credit Score?

Your credit score is a three-digit number that tells lenders how trustworthy you are when it comes to borrowing money.

It ranges from 300 to 850. The higher your score, the better.

A high credit score means you:

  • Pay your bills on time

  • Don’t borrow more than you can handle

  • Are less risky to lend to

A low credit score? That can make things harder and more expensive — or even keep you from getting approved for things you want.

Why Credit Matters More Than You Think

Here’s how your credit can affect your real life:

  • Buying a car: Most people don’t pay in full — they finance. Good credit = better interest rates.
  • Getting an apartment: Landlords check credit to make sure you’ll pay rent on time.
  • Setting up utilities or a phone plan: Companies might charge deposits if you don’t have established credit.
  • Landing a job: Some employers (especially in finance) check your credit as part of a background check.
  • Applying for student loans: Federal loans don’t check credit, but private ones often do.

So yeah — even if you’re not using credit right now, it’s still going to affect your future. And the earlier you understand how to build it the right way, the easier things will be when the time comes.

What Makes Up a Credit Score?

Credit scores are calculated based on a few key factors:

Factor What It Means % of Score
Payment history Do you pay your bills on time? 35%
Credit usage How much of your available credit are you using? 30%
Credit age How long have you had credit? 15%
Credit mix Do you have different types of credit (loans, cards, etc.)? 10%
New credit How often are you applying for new credit? 10%

Even if this feels like a lot — just focusing on paying on time and not borrowing too much will go a long way.

Common Credit Myths (and the Truth)

Let’s clear up some confusion.

MYTH 1: “Credit is bad.”
Truth: Credit isn’t bad — debt can be bad if misused. Credit is just a tool. When used wisely, it helps you build financial freedom and trust.

MYTH 2: “I’ll just wait until I’m older to care about this.”
Truth: The best time to build credit is before you need it. If you wait until you’re applying for an apartment or car loan, it’s too late to show a strong history.

MYTH 3: “Using a debit card builds credit.”
Truth: Nope! Debit cards are linked to your checking account and don’t involve borrowing. Only accounts where you borrow and pay back (like credit cards or loans) affect your credit.

How to Start Building Credit in High School (or Prep for It)

Even if you’re not 18 yet, there are still things you can do right now to prepare and start building smart credit habits.

1. Learn the Habits That Build Strong Credit

Start practicing these now:

  • Pay everything on time — even your phone bill or subscriptions.

  • Only spend money you actually have.

  • Track what you owe and what you spend — budgeting builds awareness and control.

  • Keep your money organized — use apps, check your balances, and avoid overdrafts.

These habits translate directly into credit success when the time comes.

2. Become an Authorized User

Ask a parent or trusted adult if they’ll add you as an authorized user on their credit card.

That means:

  • You get your own card linked to their account.

  • Their on-time payments and account history can help build your credit.

  • You don’t even have to use the card — you just benefit from their good habits.

⚠️ Important: Make sure their credit card company reports authorized user activity to the credit bureaus (some don’t). Also, only do this if they have a solid history — their bad habits could hurt your score too.

3. Get a Starter Credit Card (Once You’re 18)

When you turn 18, you’ll be able to apply for:

  • A student credit card (designed for first-time credit users)

  • A secured credit card (you put down a cash deposit as collateral)

Use it only for small purchases (like gas or groceries), then pay the full balance off every month. That shows lenders you’re responsible and builds your credit without going into debt.

Even one small credit line used wisely can make a big difference.

Real Talk: Credit Is Your Reputation with Money

It’s not about spending more. It’s about proving you’re responsible.

The good news? You don’t need to be rich or have a perfect credit score. You just need to:

  • Start early

  • Make smart choices

  • Build strong habits over time

Credit opens doors — and you’re already on the right path just by learning how it works.

Up next, check out How Teens Can Start Making Money: Jobs, Side Hustles, and Earning Ideas That Actually Work.