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Credit & Debt Education
Borrow on purpose, pay on time, and let your history work for you.
Credit lets you use money now and pay it back later. Used well, it helps you rent an apartment, finance a car or one day qualify for a mortgage. Used carelessly, it becomes expensive debt that follows you for years.
This area explains how credit works, what credit reports and scores measure, how credit card interest really adds up, how to borrow responsibly (including student loans), and the most common mistakes young adults make.
Lessons
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What credit is and how it worksCompleted Free preview
Credit is borrowed money plus a promise to repay it, usually with interest. About 5 minutes.
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Credit reports and credit scoresCompleted Complete Studio
Your report is the record; your score is a number calculated from it. About 6 minutes.
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Credit cards, APR and interestCompleted Complete Studio
Pay the full balance and a card is a tool; carry a balance and it gets expensive. About 6 minutes.
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Responsible borrowingCompleted Complete Studio
Before you borrow, know the total cost and how you will repay. About 5 minutes.
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Student loans and managing debtCompleted Complete Studio
Borrow for school carefully: federal and private loans work very differently. About 6 minutes.
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Common credit mistakesCompleted Complete Studio
Most credit damage comes from a handful of avoidable habits. About 4 minutes.
Practice and plan
Interactive tools with fictional sample numbers you can replace with your own. Nothing you type is sent anywhere. Included with the Complete Studio.
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Credit Decision Simulator
Work through six realistic credit decisions and see how each choice tends to affect your credit habits and costs.
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Interest Cost Calculator
See how long a balance takes to pay off and how much interest it costs at your APR and monthly payment.
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Credit Knowledge Challenge
Myth or fact? Test ten common beliefs about credit, with explanations.
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Credit & Debt quiz
5 questions with an explanation for every answer.
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Worksheet: My Credit & Debt Snapshot
A printable worksheet to put this area into practice.
Key takeaways
- Credit history affects approvals and the interest rates you are offered.
- Check all three credit reports free every week at AnnualCreditReport.com.
- Payment history is the biggest factor in FICO scores; pay on time, every time.
- Pay the full card balance by the due date to avoid interest on purchases.
- Compare total cost, not just monthly payments, before borrowing.
- Use grants, scholarships and federal loans before private student loans.
Next step
Your credit check-up
Spend 20 minutes this week getting your credit house in order, even if you have no credit yet.
- Request your free reports at AnnualCreditReport.com and look for errors.
- If you have a card, turn on automatic minimum payments.
- Run your largest balance through the Interest Cost Calculator.
- Write down the APR and due date of every account you have.
Related lessons in other areas
Sources and further reading
- AnnualCreditReport.com (official free reports) (opens in a new tab)
- FTC: free weekly credit reports (made permanent in 2023) (opens in a new tab)
- CFPB: credit card interest and grace periods (opens in a new tab)
- CFPB: credit score factors (podcast transcript) (opens in a new tab)
- Federal Student Aid (opens in a new tab)
Educational content for learners ages 16 and older. Examples are fictional or hypothetical and may not reflect your circumstances. ILUVRE does not provide personalized financial, investment, legal, tax or mortgage advice. Rules, rates and programs change; check current details with official sources or a qualified professional.