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What is a good credit score or credit history?

Would you lend a person money if you knew that they had borrowed money from your friends in the past and had never paid them back? I sure hope not! What about a person you had lent money to many times in the past and they had always paid you back first thing the next day?

This is the difference between good credit history and bad credit history. The better your credit history, the better your credit score. If you have bad credit history you will likely have a bad credit score. The more history you have of paying people back, the better your score gets.

In the financial world, your credit score is measured by your FICO score and ranges from 300 to 850.

Below 600 is bad and over 700 is good.

The problem is that you don't get points added to your score for paying your bills on time. Not even if you pay your rent on time, your phone or cellular bill, your electric bill or most other bills. But guess what? If you don't pay those bills on time, they can report you to a credit bureau and it can take away points from your score. Doesn't really sound fair, does it?

That is why it is so important to have a good credit card and use it in a way that adds to your credit history and FICO score in a good way. If you use your credit card properly, your FICO score will increase over time. It is never too early to start building your credit score.