Credit is how we are rated financially. Your credit rating is affected by almost anything you do with regards to money. If you take out a credit card your vendor will be reporting to the bureaus to update them of how you much you spend, if you manage to pay your bills early, on time or late and various other things. This also applies with banks, your bank will notify the bureau of your limits, how often you go overdrawn and if you miss a direct debit and even phone companies are in with your phone bill. Generally if this credit is bad we can't take regular loans or credit cards and are forced into looking at loans for people with bad credit.
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