Protect · Lesson 1 of 3
Credit scores & the debt that helps or hurts
A credit score (roughly 300–850) is your borrowing GPA. A good score means cheaper car loans and easier apartment approvals — and the clock can start at 18, not 25.
1Learn
- Never miss a paymentPayment history is ~35% of your score. One miss can drop you 50–100 points and stick for years.
- Keep utilization lowUse under 30% of your limit. $500 limit → keep the balance under ~$150. A secured card at 18 builds history in months.
Useful debt vs. dangerous debt
Usually OK: student loans for strong job prospects, a low-interest car loan to get to work, and someday a mortgage on a home that can build value. Debt tied to earning potential can make sense.
Usually trouble: credit card balances at 20%+ APR, buy-now-pay-later for wants, and payday loans. Debt for things already used up just means paying more over time.
2Try it Calculator
What a score costs you
$15,000 car · 4-year loan (estimates)
Credit score
730 Good
300850
The minimum-payment trap
A credit card at 21% APR
Time to pay it off
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What a car loan really costs
Most teens’ first big loan is for a car. See what you’d pay each month — and in total.
Monthly payment (loan only)
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Borrowed — Interest —
Cars lose value fast. On a long loan you can owe more than the car is worth for years — a problem if it’s totaled or you need to sell.
Example numbers, not a loan quote. First-time borrowers often get higher rates; a co-signer or a bigger down payment can help.
What a home really costs
Someday: most people buy their first home in their late 20s or 30s with a mortgage — a loan paid back over 15 or 30 years.
Monthly payment (loan only)
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Borrowed — Interest —
With less than 20% down, lenders usually add PMI (private mortgage insurance) on top — often tens to hundreds of dollars a month. It isn’t included here.
Example numbers, not a loan quote. Real payments also depend on your credit score, fees, and HOA dues.
3Check
Remember
Pay on time, every time, and keep balances low. That one habit is worth thousands of dollars in cheaper loans later.
Quick check
What’s the biggest single factor in most credit scores?
Payment history is about 35% of a typical FICO score. Bank balances don’t build credit by themselves.