Credit History

Updated on March 19, 2024
Article byPrakhar Gajendrakar
Edited byPrakhar Gajendrakar
Reviewed byDheeraj Vaidya, CFA, FRM

What is Credit History?

Credit history refers to the record of a customer’s debts and repayment history. It is the main portion of a credit report, along with other important credit details, and its availability is important for determining the creditworthiness of an individual based on their past loans and credit activities.

It is accessible via accessing the credit report. An entity can have more than one credit report, and the credit report provides a comprehensive view of credit activities and current credit situations. For example, it contains details like type of credit account, terms, recent balance, credit limit, date opened, the status of the account, and account history.

Key Takeaways

  • Credit history refers to the record of a customer’s debt and repayment history.
  • It helps banks, creditors, and other financial institutions to assess the customer’s level of ability and willingness to repay the debt.
  • Credit bureaus and credit reporting agencies sell credit reports to creditors for a fee. Experian, Equifax, and TransUnion are examples of credit bureaus.
  • A customer can have good, bad, or no credit history.

Credit History Explained

A credit history of regular and timely payments is always an attractive factor. It indicates the ability and willingness of the debtor in the debt repayment process. It explains the borrowing behavior, and if the behavior is good, it positively influences lenders’ credit-granting decisions.

Credit history

Credit bureaus or credit reporting agencies like Experian, Equifax, and TransUnion collect credit information to prepare the reports and credit scores. They also sell the information to creditors or lending institutions for a fee. The collection, research, and calculation methods used by the credit reporting agencies may be different, but they provide accurate data. Furthermore, the report is available on government-approved websites also.

The customer should have at least one credit account so that the credit bureaus can generate the history and report. Also, a minimum of six months of history is required to get a  FICO score. A solid history of seven to ten years can enhance the credit score compared to a history of a few years.

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Good Credit History

It points to a responsible debtor who follows timely payments. As a result, the customer can enjoy easy availing and processing of mortgages, credit cards, and sometimes reduced interest rates. To attain and maintain a good credit history, a person has to be responsible for their bills, repayments without default, etc. Furthermore, it enhances the credit score. If the obtained credit score ranges between 670 and 739, it is a very good credit score or FICO score.  

Bad Credit History

It portrays the customer as untrustworthy, pointing to the negative credit record. Current debt, late payments, and defaults from the customer side create a negative impression on the creditor. Other activities complementing the negative image includes bankruptcy issues, lawsuit details, and frequent application for credit cards in a brief period. If a credit score is lower than 580, it is considered a poor FICO score. 

A consumer with a bad history of loans faces many financial problems; not only do the banks and other financial institutions decline their loan application, but the consumer has to go through many legalities and faces ban issues while taking new loans. In addition, it may happen that creditors will seize and auction it to recover the debt amount.

No Credit History

It is not true that every single individual has a credit report. If a person had never dealt with credit like no credit account, never owned a credit card, never took a loan, or engaged in similar activities, there may be no credit information about that customer. It also indicates no credit score available. It is possible to obtain a loan despite having no credit, but lenders will view it more cautiously if the credit record is blank. It can make the customer’s application for a credit card or loan more likely to get rejected.


  • Josh had prior experience taking loans to buy a car and real property. He has always been responsible for his expenses. He paid all credit card payments and loan installments on time without default. All of these resulted in good credit history and a reasonably good credit score, which helped him obtain a home mortgage for buying a new home.
  • John has always been lazy and irresponsible about his expenses. As a result, his rent is due, and he defaulted on his loan repayment several times, creating a bad credit history for him. As a result, when he goes to a bank for another loan, the bank declines the loan application due to an unattractive credit report.
  • Most people do not know this, but not paying for parking tickets can reduce a person’s credit score, which is visible on their credit information. Consumers believe they only have to pay their installments on time to maintain a good credit report. Still, there is more to it, local authorities have people on their watch, and not paying for parking tickets, speeding tickets, and even overdue library books affects people’s credit reports. 

Frequently Asked Questions (FAQs)

How to check a credit score?

Lenders can access it from credit bureaus or credit reporting agencies. For example, a lender can access the credit scores of entities from Experian, Equifax, and TransUnion. It is imperative to compare the reports from all three bureaus as there are possible errors and inaccuracies that the individual can report within specified days after receiving the report.

What is adverse credit history?

It refers to an individual with poor repayment history and a negative credit rating. The borrower had taken one or more loans and was inconsistent in paying them back. The record shows it clearly on the history and therefore helps creditors to identify such customers for future.

What is included in credit history?

Credit bureaus collect information to prepare the report and credit score, given the entity or individual has at least one credit account. The history includes a list of credit accounts, the type of account, and your payment history and balance on those accounts.

This is a Guide to Credit History and its definition. We explain its examples, how to check it, good credit score, & credit bureaus like Experian. You may learn more from the following articles –