Are you a responsible borrower?

Reflect on your current borrowing behaviors before you open a line of credit.

Youth holding a credit card

Credit can sometimes seem like free money to youth and the overall excitement to be able to take part in the world of credit can be tempting to young people. Credit is the ability to borrow money. Lenders review the creditworthiness of a potential borrower to determine both the conditions of and access to credit. Youth can explore their creditworthiness before they even open a line of credit based on their current borrowing behaviors.

The National Endowment for Financial Education High School Financial Planning Program offers a “Borrowing Fitness Test” to allow youth to explore their borrowing habits. Youth and adults can have a conversation about the youth’s overall “borrowing fitness level” prior to looking at credit options or as an opener to a conversation around credit. Some similar questions to the Borrowing Fitness Test that can be explored with youth include:

  • Do you pay back family members or friends when you borrow money, even if it is small amounts of money?
  • Do you borrow items from family members or friends without asking for or getting permission first?
  • Do you return library books, movies, games or other borrowed items before they are due and return them in good condition?
  • Do you often borrow money to pay for something you can’t afford now?
  • Are you asking family members or friends to loan you money on a frequent basis?
  • Are you asking for money or items that you could save or plan for? Are the items wants or needs?

Discussing the answers to these questions can be helpful for youth in considering whether they would be a smart borrower. The overall behaviors relate to the five “Cs” of credit where youth can look at how what they are currently doing could affect their financial creditworthiness in the areas of:

  • Capital (can you save or plan for something rather than asking for help repeatedly?)
  • Capacity (can you pay back what you borrow?)
  • Character (are you responsible with returning what you owe in a timely basis?)
  • Conditions (what types of things are you borrowing? Are they wants or needs?)

Collateral—the possessions you own that could be taken as compensation for what you owe—is less addressed in the borrowing behaviors questions but can also be considered as part of a discussion. For instance, if money was borrowed to buy a video game and that money is not paid back, does the parent or guardian now take possession of that video game?

Borrowing is similar to other habits where bad habits can be altered and good habits put into practice. By working on these borrowing behaviors now and discussing how credit works, youth can have a better understanding and be better prepared to responsibly take on credit in their future.

Michigan State University Extension and Michigan 4-H Youth Development help to prepare young people for successful futures. As a result of career exploration and workforce preparation activities, thousands of Michigan youth are better equipped to make important decisions about their professional future, ready to contribute to the workforce and able to take fiscal responsibility in their personal lives. For more information or resources on career exploration, workforce preparation, financial education, or entrepreneurship, contact

Did you find this article useful?