Credit & Lending 101
Understand how credit scores work, build credit responsibly, and make smart borrowing decisions. Everything you need to know about credit before you need it.
Course curriculum
Understanding Credit
What credit is, how scores work, and why it matters.
What Is Credit?
The basics of credit and why it exists
What Is Credit?
Credit is borrowed money you promise to pay back with interest. Understanding credit is one of the most important financial skills.
Three Types of Credit
1. Revolving Credit
Credit cards — borrow up to a limit, pay back, borrow again. Risk: 20-30% APR if carrying a balance.
2. Installment Credit
Car loans, student loans, mortgages — fixed payments over a set period.
3. Open Credit
Utility bills, phone plans — pay the full balance each month.
Why Credit Matters
- Landlords check credit for apartments
- Employers check for financial roles
- Your credit NOW affects mortgage rates in 10 years
Credit is a tool, not free money.
How Credit Scores Work
The 5 factors that determine your score
How Credit Scores Work
Your credit score (300-850) tells lenders how risky you are. Higher = better.
FICO Score Breakdown
- Payment History (35%) — Pay on time, every time
- Credit Utilization (30%) — Keep below 30% of your limit
- Length of History (15%) — Keep old accounts open
- Credit Mix (10%) — Different types help
- New Credit (10%) — Don't apply for many at once
Score Ranges
- 800-850: Exceptional
- 740-799: Very Good
- 670-739: Good
- 580-669: Fair
- 300-579: Poor
Myth: Checking your own score hurts it. Reality: Soft inquiries have zero impact.
Building Credit From Scratch
Practical strategies to establish and build credit.
Your First Credit Card
How to choose and use your first card wisely
Building Credit Without Debt
Alternative strategies that don't require borrowing
Understanding Interest Rates
APR, compound interest, and borrowing costs
Smart Borrowing Decisions
How to evaluate loans, avoid traps, and borrow strategically.
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