[{"data":1,"prerenderedAt":166},["ShallowReactive",2],{"lesson-\u002Flessons\u002F5-credit":3,"lesson-next-\u002Flessons\u002F5-credit":165},{"id":4,"title":5,"body":6,"description":128,"duration":129,"extension":130,"meta":131,"navigation":132,"order":133,"path":134,"quiz":135,"seo":161,"sitemap":162,"stem":163,"__hash__":164},"lessons\u002Flessons\u002F5-credit.md","Lesson 5: Credit without the trap",{"type":7,"value":8,"toc":120},"minimark",[9,13,18,38,50,54,57,85,88,92,103,107],[10,11,12],"p",{},"Credit is a tool that most people meet as a trap. The difference is entirely in how you use it.",[14,15,17],"h2",{"id":16},"the-score","The score",[10,19,20,21,25,26,29,30,33,34,37],{},"Credit bureaus (TransUnion, Experian, XDS) track every account you have. What moves the score, roughly in order: ",[22,23,24],"strong",{},"paying on time"," (most of the game), ",[22,27,28],{},"how much of your limits you use"," (stay under about a third), ",[22,31,32],{},"age of accounts",", and ",[22,35,36],{},"how often you apply",". You're entitled to a free report from each bureau every year — checking your own never hurts it.",[10,39,40,41,45,46,49],{},"Counter-intuitively, a ",[42,43,44],"em",{},"blank"," record is a problem too: lenders can't price the unknown. A phone contract or low-limit card, ",[22,47,48],{},"settled in full monthly",", builds a perfect file at zero cost. Interest paid earns you nothing.",[14,51,53],{"id":52},"good-debt-expensive-debt","Good debt, expensive debt",[10,55,56],{},"Debt isn't one thing — it's priced:",[58,59,60,67,73,79],"ul",{},[61,62,63,66],"li",{},[22,64,65],{},"Cheap-ish and productive",": home loans, some student debt — long-term assets at lower rates",[61,68,69,72],{},[22,70,71],{},"Middle",": car finance — necessary for many, dangerous with balloons and 72-month terms",[61,74,75,78],{},[22,76,77],{},"Expensive",": credit cards revolved month to month, store accounts (20%+)",[61,80,81,84],{},[22,82,83],{},"Radioactive",": payday loans, informal loans — rates that can double your debt in months",[10,86,87],{},"The question is never \"can I get the credit?\" — it's \"what does this rand of debt cost per year?\"",[14,89,91],{"id":90},"if-youre-already-in-it","If you're already in it",[10,93,94,95,98,99,102],{},"Attack the ",[22,96,97],{},"highest interest rate first"," while paying minimums on the rest (the avalanche — mathematically fastest). Don't take new debt to feel better about old debt. If it's truly unmanageable, ",[22,100,101],{},"debt counselling"," is a legal protection, not a failure — but it flags your record until cleared, so it's a serious step.",[14,104,106],{"id":105},"the-habit-that-makes-credit-safe","The habit that makes credit safe",[10,108,109,110,113,114,119],{},"One rule does most of the work: ",[22,111,112],{},"never spend on credit what you couldn't pay cash for this month",". Credit then becomes what it should be — a convenience and a record-builder, while your actual wealth grows in your ",[115,116,118],"a",{"href":117},"\u002Ftools\u002Ftfsa","TFSA"," and retirement fund.",{"title":121,"searchDepth":122,"depth":122,"links":123},"",2,[124,125,126,127],{"id":16,"depth":122,"text":17},{"id":52,"depth":122,"text":53},{"id":90,"depth":122,"text":91},{"id":105,"depth":122,"text":106},"How credit scores work, the difference between good and expensive debt, and using credit as a tool instead of a lifestyle.","5 min","md",{},true,5,"\u002Flessons\u002F5-credit",[136,145,153],{"question":137,"options":138,"answer":143,"explanation":144},"What builds a credit score fastest?",[139,140,141,142],"Carrying a large balance and paying interest","Paying every account on time, every month","Applying for lots of credit at once","Earning a high salary",1,"Payment history is the biggest factor. Interest paid earns you nothing — a card settled in full every month builds the same history for free.",{"question":146,"options":147,"answer":143,"explanation":152},"Which debt should you attack first?",[148,149,150,151],"The biggest balance","The one with the highest interest rate","The oldest one","Whichever has the smallest instalment","Highest rate first (the avalanche method) saves the most money — an outstanding store card at 22% costs more per rand than almost anything else you owe.",{"question":154,"options":155,"answer":143,"explanation":160},"A store account helps your credit record if:",[156,157,158,159],"You keep it maxed out","You pay it in full, on time, every month","You open five of them","You never use it","The account and the trap are the same product. Paid in full it builds history at zero cost; revolved at store-card rates it's some of the most expensive debt around.",{"title":5,"description":128},{"loc":134},"lessons\u002F5-credit","XWKsohLp244vslL5DyK4cyVUOatzu9CHPnJcV_GRTOM",null,1785421697618]