Tag Archives: Credit Scores

Teenage Habits That Lead To Poor Credit Scores

We all know that teenagers aren’t great with money. But there are certain habits that tend to lead to poor financial decisions later in life. You’ll want to discourage these behaviors because having poor credit is something that isn’t easier altered. Adverse incidents on credit scores, such as delinquent payments or a bankruptcy, can stay on credit scores for upwards of a decade, leaving those looking for credit without the ability to get the money that they need. Here are the behaviors that you’ll need to look out for to make sure that your teenagers don’t grow up to have poor credit.

Teenagers that consistently run out of money despite having a job or an allowance show an inability to properly handle money. Money management is critical to having good credit in the future, because budgeting and understanding credit limits is a huge part in making payments on time. If teenagers are consistently running out of money, don’t bail them out—let them learn from their mistakes, and let them learn they have to be better with their money.

Charging up credit cards is a bad sign for teens. Teenagers might not understand that carrying a large balance damages your credit score because credit card companies see that you are spending outside your means, and this typically means that you’ll be paying late or not at all. Just running up a large balance can damage your credit score, so make sure that your teenager knows this.

Teenagers that don’t want to work, at their job or at school, typically find themselves in low pay situations which hamper their ability to pay back their credit. Try to tie in some rewards for doing a good job at work, and make sure that teenagers know the importance of working hard on a regular basis. Teenagers working a steady job with solid grades tend to have better credit scores later in life, because they learn the value of money and hard work early on.

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