Credit means you are using someone else’s money to pay for things. It also means you are making a promise to repay the money (the debt) to the person or company that lent you the money. Good credit means that you make your loan payments on time and repay your debts as promised. Good credit is important because it makes it more likely that you can get a new loan in the future when you want to make a major purchase, such as a car or a home.
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