Credit History

What is credit history? Simply put, credit history consists of anything that is reported to the three major credit bureaus.

First, whenever you apply for credit or financing of any kind, they'll pull your credit report from one or more of the three major credit bureaus. These are TRW, Trans Union, and Equifax.

These three credit bureaus collect and update information on most Americans. They are not government-affiliated, though. They're for-profit corporations, and they make money by selling your personal credit information.

These credit bureaus receive your information from the same lenders who grant you credit. Each of these credit grantors have an agreement with the credit bureaus that requires the credit grantor to notify the credit bureau of anything and everything that affects your relationship with the credit grantor. A late payment will result in a negative credit listing with at least one of the major credit bureaus. This negative credit listing will be added to your credit history. Your credit report is not just a reflection of how you're currently doing with your credit accounts - your credit report is a history of everything you have done with your credit in the present and in the past.

Credit bureaus accumulate all of your credit listings, both positive and negative, list the info in your credit report, and then sell it to lenders and other credit grantors who want to see how you've managed your credit before they decide whether to lend you money or grant you credit. Especially interesting to credit grantors is your negative credit listings - late payments, or other disregard for your financial commitments, will result in immediate rejection of your credit application.

Your credit report is just like your report card in grade school. It's the financial "permanent record" that you've got to keep in mind whenever you use credit.

It's a good idea to check your credit reports from the Big Three credit bureaus at least once a year. You can get your credit reports for free at the Annual Credit Report website. I've done this myself, and if you have plenty of time to go through the verification process, I recommend it. Unfortunately, I was only able to get one of my credit reports (some glitch in their system, I guess), but it was free.

If you'd like free, immediate access to your credit report, you have a couple of choices:

Free Credit Report From Adaptive

Experian Free Credit Report

I've tried both Experian and Adaptive, and they're both relatively easy to use and understand. And, since they're both fast and free to try, they're a more convenient choice than the Annual Credit Report.