Feb 18, 2025
Your credit history is the main source of information for potential lenders to learn about your financial past and present. Some people have a long credit history. Others have a short credit history. And some people have no credit history at all.
As the name suggests, your credit history tells the story of how you’ve managed your money over time. This history typically includes loans you’ve had and how you handled them. The information can come from various sources, including banks, other lenders, government programs, and collection agencies.
Your credit history can be found in your credit reports, which are used to calculate your credit score. Potential lenders look at your score when deciding about loan approvals and interest rates.
Knowing your credit history can give you helpful information before you look for a loan. It’s in your best interest to understand your credit history and how it may affect your financial goals.
A credit history is a record of a person’s borrowing and financial activity over time. It can be found in a credit report, which is put together by three main credit bureaus: Experian®, Equifax®, and TransUnion®.
Your credit history can answer many questions, including:
Credit reports with your credit history are used by credit rating agencies, like FICO®*, to create your credit score. A credit history is important because potential lenders use this score to decide whether to offer you a loan and what interest rate to charge.
Your credit history can be found in your credit reports. You can request a free copy of all three of your credit reports annually from annualcreditreport.com. After you receive your free copies, you can still request additional credit reports, for a fee. Checking your credit reports won’t impact your credit score.
Your credit history is built over time as a record of your financial activity. Potential lenders and other companies collect information about your accounts and give it to the credit bureaus.
The credit bureaus create a profile for you, including your personal information, credit accounts you’ve had, your payment history, inquiries from lenders, possible bankruptcy filings, or accounts sent to a collection agency.
For example, your credit report may list these details:
Nobody begins their credit journey with an established credit history. In fact, according to a study commissioned by Experian, 28 million American adults are “credit invisible” meaning they have no credit history. Another 21 million are “unscoreable”, or don’t have enough credit history to get a credit score.1 If you have no credit history, here are some ways to begin building it:
To begin building your credit history, you might think about getting your first credit card or secured card. Some credit cards may be offered to people with no credit history, often with a small line of credit. For some people, getting a secured card is more realistic. A secured card offers a line of credit equal to the amount of a deposit you leave in an account with the lender. How well you handle your line of credit and repayments is recorded in your credit report.
Another way to establish a credit history is to be listed as an authorized user on another person’s credit card. Depending on the lender, this might be reported to a credit bureau and may affect your credit score. Because your credit history will be tied to the primary credit card account holder, make sure you’re an authorized user on an account that remains in good standing.
Utlities or landlords don’t regularly report your information on your credit reports. You can research programs available from credit reporting agencies and others let you add your regular payment of rent, utilities, cell phone, streaming services, etc., into your credit score. If you’re paying those bills on time, it could help demonstrate your ability to pay on time, which may demonstrate creditworthiness.2
Your credit history begins when your name is put on a credit account. To calculate a credit score, at least one account must be open for at least six months, according to FICO®, which provides scores used by 90% of top lenders.
If you don’t have a credit score, don’t feel alone. The U.S. Government Accountability Office found that about 45 million American adults have no credit score because they have limited or no credit history.3
Because the length of your credit history affects your credit score, the longer you have credit in good standing, the better your score might be. Credit scores are partly determined by how many years you’ve had your oldest account and the average age of the accounts that you have.
In addition to knowing the basic details associated with your credit history and credit report, you’ll also want to keep an eye on your credit score.
Based on your credit history, your credit score is calculated by the three credit bureaus, Experian®, Equifax®, and TransUnion®. Here are some things to know:
You should review your credit score often. Many lenders offer their customers free access to credit scores. As a Discover® customer, you can get your FICO® Credit Score, plus see important details that help make up your score.
It’s important to understand how FICO® Scores are calculated.4 Scores are based on five general categories:5
Because credit scores might change over time, it’s a good idea to know your score, especially before you apply for a loan. Your good financial habits may eventually lead to a higher credit score.
Just as there are things you can do to affect your credit score positively, there are several factors that could have a negative impact:
While some of these behaviors may have more of an impact on your credit rating than others, it’s a good practice to try to avoid them all.
Your credit history and credit score might affect your finances in many ways, so it’s important to keep your eye on them. Understanding what your financial situation looks like to others and how you might make changes to improve it is an important step to help you set and achieve your financial goals.
Now that you know what credit history is and how to build it, do you want to learn more about budgeting your money to improve your financial health? Read these tips to improve your money management.
Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third party or information.
* FICO® Credit Score Terms: Your FICO® Credit Score, key factors and other credit information are based on data from TransUnion® and may be different from other credit scores and other credit information provided by different bureaus. This information is intended for and only provided to Primary account holders who have an available score. See Discover.com/FICO about the availability of your score. Your score, key factors and other credit information are available on Discover.com and cardmembers are also provided a score on statements. Customers will see up to a year of recent scores online. Discover and other lenders may use different inputs, such as FICO® Credit Scores, other credit scores and more information in credit decisions. This benefit may change or end in the future. FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.
