Credit can be very useful if managed correctly. A good example is when you borrow money for something that will increase in value (such as a house). Loans you pay off monthly over time, like mortgages or car loans are considered “good debt” because they allow you to budget for the monthly expenses and build a history of paying bills on time. That payment record can improve your credit score, in contrast to unsecured loans like credit card debt, which can spin your monthly expenses out of control. If you can’t afford to pay these bills, you can end up paying higher and higher rates of interest, which can help ruin your credit. The important thing is to make sure you will be able to make all of your payments on time and in full before you take out any kind of loan.