Credit history (also called a credit report) is a record of an individual’s borrowing and repayment activity. It typically lists loans, credit cards, payment timeliness, outstanding balances, and certain public records such as bankruptcy. The related term credit score measures the information in a credit report and is often used by lenders to summarize creditworthiness.
What appears in a credit report
- Personal identifying details (name, address and similar)
- Accounts with lenders, including account opening dates, credit limits, balances and payment history
- Records of late payments, collections, defaults and repossessions
- Public records that affect credit, for example certain court filings or bankruptcy
- Inquiries from businesses that have requested the report
Who checks credit histories and why
When someone applies for new credit, institutions such as a bank, a retailer or a credit card issuer commonly review the applicant’s credit file. Lenders use this information to decide whether to approve the application, set interest rates and determine lending terms. Employers, landlords and insurers in some jurisdictions may also review credit information for certain decisions.
Obtaining and correcting a report
Rules vary by country, but many places allow consumers to access their own credit reports and challenge incorrect items. It is important to check reports regularly and follow the procedures provided by the relevant credit reporting agency or lender to dispute errors or update information.
Effects of credit history
A good credit record generally makes it easier and cheaper to borrow money, while negative entries can limit access to credit or lead to higher borrowing costs. Building and maintaining a positive history involves making payments on time, keeping balances manageable and closing disputes promptly.