A teen begins generating a credit history at the age of 18 so it's vitally important that all teens understand that how they handle credit cards today affects their credit history in the future. As a parent, it's critical that you convey that message loudly and clearly.

They must know that down the road a negative credit history is a serious liability. So inform them that credit bureaus keep track of their credit history, and that they will assign a credit rating, which can be accessed–usually within seconds–by employers, credit unions, banks, mortgage and insurance companies, and apartment managers.

If they have a poor credit rating because of a bad credit history, this will prevent them from obtaining the things in life they want and need. So as soon as they receive, sign, and use a credit card for the first time, your teen's financial responsibilities start. Urge your teen to take time to read all the terms and conditions that come with a new credit card account.

Also, counsel them that they can receive copies of their credit bureau files from a number of sources. Under the FACT Act, everyone is entitled to one free credit report per year from each of the three major bureaus. You all can access these reports by visiting ... www.annualcreditreport.com.