At some point in your life you will probably want to borrow money from a financial institution. You might want a loan for your first car, or a credit card to make travel reservations or online purchases. There’s a good chance that you’ll want to own your own home someday and for that, you’ll likely need a mortgage.
It’s important to establish good credit early on because lenders take this into consideration when deciding whether to loan you money. Your credit history is a record of funds you’ve borrowed and paid off over time.
As part of the credit approval process, a lender will look at your credit history to see how you’ve handled your debts in the past. It’s worth noting that the best rates go to those with the best credit.