Credit history is an official record that shows the company or personal history of borrowing and paying back loans. This history provides business or personal identifying information, a record of credit that the individual or company has, and negative elements such as bankruptcies and late payments.
It describes how individuals use their money and finances. It lists out the number of credit cards, loans and other obligations, and bills that a consumer has. It keeps records of whether they pay these bills in a timely fashion. The credit history information is compiled as companies send in data on credit cards and loans to one of the three main credit bureaus. These are Experian, Equifax, and TransUnion. They act as the gatekeepers of credit history.
These companies compile all of this information on credit and bills into a file called a credit report. This credit report is the repository of all an individual’s credit history. It contains a great deal of personal information that starts with the owner’s name, social security number, and address. All credit cards and loans are itemized out and detailed. It states the total money a person owes. Finally, credit reports put together a profile on the individuals as to whether they pay their bills late or on time.
Credit history and credit reports are important for individuals. Businesses will not loan out money to people until they know all about them and their spending and borrowing habits and past. Businesses find all of this information on personal credit history in these credit reports and then make decisions as to whether they will extend credit in the form of a credit card or make a loan to the applicant.
Some employers choose to examine a candidate’s credit report along with a job application. Insurance companies also consider it when they are determining rates of their customers. Even cell phone and utility companies often look it up when they are deciding how much a person will need to pay in deposits to start service.
Credit history is also used to create a credit score. Credit scores are numbers that the three credit reporting bureaus maintain for individuals using their credit history. If the credit history is good, then the credit score will be as well. Individuals can see their credit history and obtain their credit reports for free every year. Credit scores are not available unless people pay for them.
High credit scores convey a good credit history. Lower credit scores refer to a poor credit history for an individual. Each of the three credit bureau companies will have a slightly different score for a person. High credit scores range from 700-850. Low credit scores start from 300 to 600.
Credit history as shown in a personal credit report is very important to know. Each of the three companies is required to send individuals their credit report every year showing personal credit history on demand. Individuals are able to request this at no charge by going to AnnualCreditReport.com.
There are other companies that advertise offers to provide credit scores for free along with free credit reports. These are usually promotional offers that require individuals to sign up for a monthly service of some type in order to qualify for them. Such offers are often monthly credit monitoring services for a fee. As a rule, a person will generally have to pay something to obtain his or her credit scores.