Your Own Financial Report Card
A credit history is a detailed record of your credit activity. It includes information on borrowing and repayment of credit cards, bank and car loans, mortgages and any other debt owed to a creditor. Your credit history will not only include open accounts, but includes any credit card accounts and loans applied for or closed. A credit history lists late payments, defaults on loans and bankruptcy. It reflects your ability to handle credit and submit timely payments. Learn more about your credit history and how to keep it clean.
A credit history is one factor that determines your credit score. Things considered negative on a credit history include, bankruptcy, late payments, high credit card balances and defaulting on a loan or credit card account. These negative marks contribute to a lower credit score.
A good credit history is important for a number of reasons. Credit card companies along with banks and mortgage companies want to provide loans and credit to people who are considered a good risk. This means people who will payback the money. If a person has a poor credit history, and likely a low credit score, they may be considered a high risk and have a difficult time obtaining credit, including loans. If credit is obtained, it may be at a higher interest rate than someone with a good credit history.
Consumers have the right to request a free credit report from each of the three major credit agencies every year. In compliance with the Fair Credit Reporting Act (FCRA), Equifax, Experian and TransUnion have set up a central website and a toll-free telephone number through which you can order your free annual report. To order, visit annualcreditreport.com or call (877) 322-8228.
What¡¯s in a credit history?
Your credit history is contained in a credit report that¡¯s kept on file by credit bureaus. This report might include:
- List of credit card accounts
- How promptly you’ve paid off credit cards and loans
- How well you have handled other bills, such as rent and utilities
- Your checking and savings account histories, including bounced checks
- Your total outstanding debts
- How much credit you still have available on your cards
Who has access to it?
Anyone considering giving you credit or a loan¡ªincluding credit card issuers, auto-financing companies, college loan issuers, and insurance companies¡ªcan legally access this information. Landlords and potential employers can also view your credit report.
Who stores this information?
Credit bureaus are independent agencies that collect information on people who use credit. They act as central distribution centers for credit information, making it easy for potential lenders to access your credit history quickly and easily. All credit bureaus should have the exact same information on your history.
A number of laws regulate credit bureaus and protect your rights. For more information, contact your regional Federal Trade Commission office, or write to:
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Checking your credit report
You should review your credit report at least once a year. Per the Fair Credit Reporting Act, you have the right to see a copy of your report, which is maintained by three national credit bureaus and may also be collected by local credit agencies. If you have been denied credit in the past sixty days, you are entitled by law to receive a free copy of your report from the credit bureau that issued it.
Credit bureaus will issue your credit report for a nominal fee. Check your yellow pages or reference one of these national credit bureaus: