How Money Works · 2 min read
Credit and Credit Scores
What credit is, how credit scores work, what affects your score, and how to build good credit responsibly.
Credit is the ability to borrow now and pay later. Lenders decide whether to lend, and at what rate, partly by looking at your credit report and credit score.
What affects your score
- Payment history: paying on time matters most.
- Amounts owed: using a small share of your available credit helps.
- Length of history: older accounts help.
- New credit and credit mix matter less.
Check your reports for free
You're entitled to free credit reports from the three major bureaus at AnnualCreditReport.com, the official site. Review them for errors and dispute anything that's wrong.
Build credit wisely
Pay every bill on time, keep card balances low and pay them in full when you can. Be wary of companies promising to "erase" accurate negative information. No one can legally remove accurate, current information.
Updated November 15, 2026. General education only, not financial advice.