Let’s talk credit.
Not the most exciting topic, right?
But over the past few summers, OCE cohorts have worked with some incredible fintech companies tackling underdeveloped credit systems in Southeast Asia. Take InvestED, which helps disburse student loans to youth, or Agrig8, bridging the financial gap for smallholder farmers.
Whether it’s transforming lives in ASEAN markets or managing finances closer to home, credit plays a big role in our society in terms of accessing capital and opportunities.
You may believe that credit doesn't matter until you're older, but the truth is the earlier you start building good credit, the better your financial future will be.
We’ve rounded up four of the most common credit questions we hear from teens. Let’s break them down for you!
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But FIRST
If you are new, welcome to OCE’s weekly newsletter curated for the ambitious youth…here are some articles you missed from previous weeks:
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Do You Have the Guts to Bet Against the Odds?
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Best tools for building your passion project
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FAQ #1: Building credit is only for adults, and why does it matter to me?
It’s never too early to start building your credit!
A credit score is like a financial report card that shows how responsible you are with borrowing money. It’s a number (typically between 300-850) that lenders and landlords use to decide whether to trust you with things like loans, credit cards, or even renting an apartment.
Why does this matter now? A solid credit score takes a long time to build. It can also open doors and save you money down the road—think lower interest rates, easier approvals, and better terms. On the flip side, not having any credit or having a low score can be a real obstacle.
For example, I’ve personally faced the consequences of not building credit when I first moved to SF—I was rejected from an apartment rental because of a thin credit history. It was a big lesson learned, and I realized how important it is to start building credit early, have that good track record in place, to avoid those bumps down the road!
FAQ #2: Is credit card the same as debit card?
Great question! Here’s a quick breakdown:
- Debit card: You’re spending your own money directly from your bank account.
- Credit card: You’re borrowing money from a lender and agreeing to pay it back later (ideally, on time to avoid interest fees).
I am a proponent of using credit cards whenever possible.
For starters, credit cards help build your credit history. Every responsible swipe and on-time payment boosts your credit score.
There’s also the perks factor: cash back, travel rewards, and fraud protection. Unlike debit cards, which pull from your own funds, credit cards shield your money while giving you better tools to dispute unauthorized charges.
If your debit card gets hacked, your own cash is tied up until the issue is resolved. With a credit card? It’s the bank’s money at risk, not yours. :)
That said, a credit card only benefits you if you use it responsibly. I make sure to keep my spending in check, keeping utilization <5% each month to avoid any potential dips in my credit score.
FAQ #3: I won’t qualify for credit card until I’m older, how can I build credit now?
No credit card? No problem.
If you don’t have a credit card yet, you can still start building your credit with alternatives like a secured credit card, where you make a small deposit and your credit limit is based on that deposit.
Another option is to become an authorized user on someone else’s account, like a parent or guardian’s. Both options let you build credit history without taking on too much risk.
Finally, you can also look into credit-builder loans, which are small loans designed specifically to help people build or improve their credit. You’ll make payments like a regular loan, but the money stays in a bank account until it’s fully paid off.
I personally used self and seedfi when I first started out.
FAQ #4: I just got my first credit card, how do I keep track of my progress?
Congrats on getting your first credit card! Now, let’s talk about keeping track of that credit score.
I use Credit Karma (for US) and Borrowell (for Canada) to stay updated across all three major credit bureaus - institutions that issue credit scores.
Here’s a pro tip: after my personal info was leaked in a big data breach last year, I froze my credit with all three credit bureaus for extra protection. This prevents anyone from pulling a hard inquiry or opening new accounts unless I unfreeze it in advance – shielding my credit score.
Staying on top of your credit score is key—especially when you’re building it. Pay on time, keep your credit usage low, and regularly check for any unexpected changes, errors, or fraud.
It’s a small effort that pays off big in the long run!
Becoming a founder made me realize that credit is more than just a number. It’s a tool that helps you open doors—whether it’s for securing your first apartment or getting the best terms for bigger loans down the road.
The journey to building your credit starts today, and trust me, future you will be glad you started early.
Cheers to your financial glow-up,
Like what you read? Share with friends!
PS. This summer, we are going to tackle pressing global issues and drive innovation in regions (such as your own community) where it is needed the most. Want in?
We run a summer cohort for ambitious youth (high school and undergrads) to work directly with world-class founders while learning from Silicon Valley leaders.
You can also explore purposeful opportunities through our Impact Internship Opportunities Database.
Get Curious.
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Lena
https://www.openclassroomexperience.com/
