Every parent wants their teen to get the best possible educational, physical, emotional, and financial start in life. They send them to good schools, sign them up for sports, and teach them quality values, but personal finance and credit is often left to chance. Modern school curriculums often fail to educate teenagers about balancing the checking account, getting credit responsibly, and avoiding debt. It is up to the parents to give their teens the best financial start in life as possible.

A person's credit report and score follow them throughout their life. A high rating can save your teen money in the long run on interest rates for car purchases, personal loans, and mortgages. It also opens doors to more educational and business opportunities and prevents a lot of headaches and stress.

4 Steps To Build a Teen's Credit Rating Early

Parents who follow these steps when their child turns into a teenager may prevent a lifetime of stress, unhappiness and all the other problems associated with poor credit and debt.

Step #1 – Teach Personal Finance

By the time a child is 10 years old, he should understand what money is, how to get it, and how to spend it responsibly in very basic terms. By the time a child is 15, the parent should have covered credit and debt, interest rates, and basic methods of applying for personal loans and mortgages, and the permanency of the credit report.

Step #2 – Earning Money Comes First

Many teens have part-time jobs, occasional work such as babysitting, or may even run a small business online. Before credit can be built, there has to be money to pay any loans or debts off with. Open a joint checking account or a private account for an older teenager. Start them off with a debit card to learn real world money management.

Step #3 – Shared Credit Helps

Most adults have one or more credit cards that they use on a regular basis. They can help their teen build a positive credit rating by making their child an authorized user of the card. This does not mean the parent needs to hand out their credit card to the teen whenever she wants to buy something. The teen may never have access to the card at all, but it will be building a positive credit use history for her.

Step #4 – Entering the World of Responsible Credit

For many young people, some of the first debt they encounter is student loans. Sit down and go over the repayment plan in detail to make sure the teenager knows what is expected from them. This may be the perfect time for someone to get their first credit card. While many credit companies do not issue unsecured cards to people with no credit, store cards and secured cards are relatively easy to get.

As long as the teen in question has a stable income and the understanding of how important it is to pay the card off every month in full, their credit rating will constantly improve and open up more possibilities for their financial future.