What Is Credit History?

A woman checking her credit on her tablet

If you avoid looking into your credit history, you’re not alone.  

A 2023 survey from TransUnion revealed that 26% of adults monitor their credit once a month at most. Another survey from FormFree found that 20% don’t know how to check their credit scores and 10% have no idea what their scores are.  

For anyone in the dark about their credit history, our guide can help you conquer this intimidating topic. We’ll share free credit monitoring resources, dispel common credit myths and give you simple tips for getting your credit on track. 

What is credit history?

Credit history is the record of how you’ve managed debt over the last seven to 10 years. Your credit history includes your activity with credit cards, loans and any collection debts you’ve had during that period.  

When a creditor reports your debt activities to a credit bureau—such as Experian, Equifax or TransUnion—the activity appears in your credit report. The information is also used to generate your credit scores. The more positive your credit history, the higher your scores will be. 

Elements of credit history 

Your credit history includes details about the money you borrowed and whether you paid it back on time. Here are the main elements of your credit history and a breakdown of how each element impacts your FICO credit scores:   

  • 35% payment history: Whether or not you make debt payments on time.    
  • 30% credit utilization: How much of your available credit you use (the less, the better).  
  • 15% length of credit history: Average age of your debt accounts (older is better) and whether or not they’re active. 
  • 10% hard inquiries: Applications for new loans or credit. 
  • 10% credit mix: Whether or not you’re managing different types of debt, such as a mortgage, auto loan or credit card. 

Why credit history matters 

Credit history directly affects your ability to qualify for loans, credit cards, insurance, and certain jobs. The better your credit history, the more likely you are to qualify. 

Positive credit history also helps you obtain better terms—including lower interest rates—on loans and credit cards, which can make your monthly payments lower and drastically reduce the cost of borrowing money.  

Common misconceptions about credit history 

Most of us didn’t learn anything about credit in school, so we have big misconceptions about managing credit. Here are some common myths that might be damaging your credit history: 

Myth: Closing credit accounts improves credit history 

Closing a credit card account can actually hurt your credit profile and cause a drop in your credit scores since it reduces your available credit. 

Myth: Pulling your credit reports negatively affects your score 

Pulling your credit reports doesn’t have any impact on your scores. In fact, it’s an essential habit for maintaining good credit. 

Myth: Some information stays on your credit reports forever 

Most information remains on your credit reports for seven years, but Chapter 7 bankruptcy stays on for 10 years after the bankruptcy is completed. 

Myth: Utility bills and medical bills are part of your credit history 

Utilities and medical bills are not reported to the credit bureaus since they are not debt. If you fall behind on your payments, however, a bill can turn into a debt and may impact your credit history. 

Myth: You can have accurate, negative information removed from your reports 

If you find an error on one of your credit reports, you can file a free dispute with the credit bureau to have it removed. But if the information is accurate, it will stay on your reports. 

How to check and monitor your credit reports 

Reviewing your credit reports is a crucial habit for maintaining financial health. When you review them, you can identify opportunities for improvement, find and fix errors and deal with red flags for identity theft

You can pull all three credit bureau reports for free through the government-sponsored website AnnualCreditReport.com, or by calling 877-322-8228. This is the only source where consumers have guaranteed access to complete copies of your reports. Just be cautious when searching for the website online, since many scam websites have similar names.  

To pull each of your reports, you’ll need to provide: 

  • Your name  
  • Current address and possibly a prior address 
  • Social Security number 
  • Date of birth 
  • Information about your credit history, such as the dollar amount of your personal loan payment 

Note that AnnualCreditReport.com doesn’t give you credit scores. You may have complimentary access to one of your scores through your credit card issuer, or you can view a score by signing up for a free credit monitoring service from FICO or Experian

Start building credit sooner rather than later 

Many people avoid thinking about their credit until they’re in the market for a loan or a new apartment. But it takes time to build up a positive credit history, so procrastinating could put you in a bind.  

Instead of waiting, pull your credit reports ahead of time and look for ways to improve. If you want to jump-start your credit history, consider having a friend or family member add you to their credit card as an authorized user or applying for a secured credit card.  

Being proactive will pay off in more ways than you might think. According to a survey from FICO, most people (85%) feel more secure when their credit score is healthy.  

Frequently asked questions about credit history

What is credit history, and why is it important? 

Credit history is the record of your debt activity over the last seven to 10 years. A negative credit history can hurt your ability to qualify for loans, credit cards, apartments and certain jobs, including roles that require security clearance.  

How can I check my credit history and obtain a credit report? 

You can check your credit history by pulling all three of your free credit reports from AnnualCreditReport.com. You can also access information about your credit history through other online sources, but even if you pay, you may not see your full reports. 

What factors affect my credit history and credit score?  

There are several factors that affect your credit history and credit score. You can improve them by staying current on your credit card and loan payments, maintaining low debt balances compared to your credit limits, and keeping applications for new credit cards and loans to a minimum. 

Written by Sarah Brady | Edited by Rose Wheeler

Sarah Brady is a financial writer and speaker who’s written for Forbes Advisor, Investopedia, Experian and more. She is also a former Housing Counselor (HUD) and Certified Credit Counselor (NFCC).

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