Lighting up an LED after entering a "password"

Masqqq:
I'm sorry but I just began programming in Arduino so I don't really know how to do any of that.

No problem, you have to start somewhere. Do some research on arrays, they are very useful.

To get you started upload this program to your Arduino. Note that it is intended to illustrate many of the things that I suggested you do. It does NOT do what you described but might help you understand arrays

char password[] = {"ABCD"};  //an array of 4 chars (0 to 3)
byte index = 0;  //index to the current chracter

void setup()
{
  Serial.begin(115200);
}

void loop()
{
  Serial.print("index : ");
  Serial.print(index);    //current value of index
  Serial.print( "  the letter at that position : ");
  Serial.println(password[index]);  //print the current letter
  delay(1000);  //wait a bit to slow things down in this demo
  index++;  //increment the index
  if (index == 4)  //if we have gone past the last letter
  {
    Serial.println("All done\n\n");  //print a message
    delay(2000);  //wait a while in this demo
    index = 0;    //put the index back to the start
    return;    //start the loop() function again
  }
}