As a teenager, you may not be thinking about car loans, apartment applications or mortgage payments yet. But there is one financial tool that can have a big impact on all those future milestones: your credit score.
If you've heard adults talking about credit scores and wondered what they actually are, you're not alone. The good news is that credit scores aren't as complicated as you might think. Understanding how they work now can help you make smart financial decisions for years to come.
What Is a Credit Score?
A credit score is a number that helps lenders understand how responsible you are with borrowed money.
Think of it as a financial report card. Just like a teacher might look at your grades to measure your academic performance, lenders look at your credit score to evaluate how likely you are to repay money you borrow.
Credit scores typically range from 300 to 850. In general, the higher your score, the more confidence lenders may have in your ability to manage debt responsibly.
Why Do Credit Scores Matter?
You might be wondering why a three-digit number is such a big deal.
Your credit score can affect many important parts of adult life. A strong credit score can help you:
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Qualify for a car loan
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Rent an apartment
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Receive lower interest rates on loans
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Save money over time when borrowing.
In some cases, landlords, insurance companies and employers will review your credit history when making decisions.
Building good credit early can give you more opportunities in other aspects of your life, and potentially save you money in the future.
How Is a Credit Score Built?
Your credit score is based on information in your credit report and calculated by the three major credit bureaus: Equifax, Experian and TransUnion.
Several factors help determine your score, including your payment history and how you use credit.
Here are some of the biggest influences:
Paying Bills on Time
When you make payments on or before the day they’re due, it demonstrates responsibility and reliability. Consistently paying on time or early can help strengthen your credit profile over time.
Keeping Credit Card Balances Low
If you have access to a credit card, it's important not to use too much of your available credit. Use your credit card for everyday purchases like gas or subscriptions, and pay off the balance as soon as possible.
Using only a small portion of your credit limit shows lenders that you're managing credit wisely, rather than relying heavily on borrowed money.
Length of Credit History
Credit scores also consider how long you've been using credit. That's one reason why building your credit early is actually a smart move. A longer history of responsible credit management can work out in your favor.
How Can Teens Start Building Credit?
One common way to begin building credit is by becoming an authorized user on your parent’s or guardian's credit card account. If the account is in good standing and payments are made on time, this positive history may help you begin building your own credit history as an authorized user. It can also give you an opportunity to learn about credit before you apply for your own credit card.
Once you turn 18, you become eligible for credit products of your own. Our Student Credit Card is a great tool for teens and young adults who are just getting started. With a $1,500 credit limit and a fixed APR1 as low as 9.90%, it’s a great way to build credit and get familiar with credit cards without spending getting out of control.
Start Building Healthy Financial Habits Today
Even if you're years away from applying for your first loan, now is a great time to start learning about credit. Practicing budgeting, saving money and tracking spending can help prepare you for future financial decisions, including building credit.
Remember, a strong credit score isn't built overnight. It's earned through small, consistent choices over time. By learning the basics now, you'll be better prepared to confidently navigate your financial future when the time comes.
1 APR = Annual Percentage Rate. As of date 7/27/2026 rates are based on an evaluation of applicant credit. Your actual APR will be disclosed at the time of credit approval. Not all applicants will qualify for the lowest rate. Credit Card rates apply to cash advances, balance transfers and outstanding balances on purchases. Foreign Transaction Fee is 1.00% of each transaction in U.S. dollars.
