Managing your credit is extremely important to your financial future. Having good credit means that you have a history of paying back your debts and paying off your bills in a timely manner. It shows banks, stores, and other institutions that you're responsible with money -- that you are willing and able to pay your bills and pay off your debts.

Why is that important to know? Because when you go to apply for a loan, such as a car loan or home mortgage, the bank or the car dealership will get a copy of your credit report and use it as part of how they decide whether or not to approve you for a loan.

Employers and insurance companies can also access and use your credit report as a way of determining whether or not to hire you or to approve you for an insurance policy.