2 basic forms - revolving (credit cards & lines of credit) and installment (cars, personal loans, home loans)
Using Credit gives you a Credit Score. The lowest being 300, and the highest being 850. The Credit Bureau has a credit record on file for every adult along with their credit score. Your profile allows banks or other places know your credit worthiness. Your credit worthiness is based on three things: Capital- value of what you own, Capacity- your ability to pay, and Character- your sense of responsibility. If you use credit, you will have an interest rate, or an APR. The interest is what allows the lender to make money. Interest is the extra money you will have to pay along with the money you borrowed. Credit cards are the main way to use credit, you buy now, and pay later. A personal loan is an unsecured loan. This means the borrower can't be trusted to pay back the money they borrowed.