What's the Big Deal?

The "American Dream" costs money. Having a family, a car, a house—all of it costs money. And chances are, you won't be able to pay cash for some of the bigger things your family needs.

That's where credit comes in. In order to borrow money—and that includes credit cards too, since you're basically borrowing money from a credit card company and promising to pay it back—you need good credit, so banks, landlords, insurance companies, etc. can feel confident that you can be trusted to pay them.

If you have no credit or have experienced some financial setbacks in the past that have negatively affected your credit, lenders won't be very eager to loan you the money you need, which can keep you from buying that car, paying for school, or investing in a home. Good credit, on the other hand, means you can get the financing you need, and usually at a better rate, which will save you money in the long run.

Bad credit can make it much harder to get a loan, but we have some good news—credit scores can change. You can't go back in time and change what you have done in the past, but you can start being smart with your money, and can rebuild your credit score over time.