Credit History
Credit history is a record of an individual’s or business’s past borrowing and repayment activity. It is used by lenders to determine whether to approve a loan and what interest rate to charge. Credit history is also used by employers, landlords, and insurance companies to assess an individual’s financial responsibility. Credit history is compiled by credit bureaus, which collect information from lenders and other sources.
History of Credit History
The concept of credit history dates back to the early days of banking. In the 19th century, banks began to keep records of their customers’ borrowing and repayment activity. This information was used to assess the risk of lending money to a particular customer. As the banking industry grew, so did the need for a more comprehensive system of credit history. In the early 20th century, credit bureaus were established to collect and store information about individuals’ and businesses’ credit histories.
Today, credit bureaus collect information from a variety of sources, including lenders, employers, landlords, and insurance companies. This information is used to create a credit report, which is a detailed record of an individual’s or business’s credit history. Credit reports are used by lenders to assess the risk of lending money to a particular customer. They are also used by employers, landlords, and insurance companies to assess an individual’s financial responsibility.
Table of Comparisons
| Type of Credit | Minimum Credit Score | Interest Rate |
|---|---|---|
| Mortgage | 620 | 3.5% |
| Auto Loan | 600 | 4.5% |
| Credit Card | 650 | 15.99% |
Summary
Credit history is a record of an individual’s or business’s past borrowing and repayment activity. It is used by lenders to determine whether to approve a loan and what interest rate to charge. Credit history is also used by employers, landlords, and insurance companies to assess an individual’s financial responsibility. Credit history is compiled by credit bureaus, which collect information from lenders and other sources. For more information about credit history, visit the websites of the three major credit bureaus: Experian, Equifax, and TransUnion.
See Also
- Credit Report
- Credit Score
- Credit Bureau
- Debt
- Interest Rate
- Loan
- Credit Card
- Mortgage
- Insurance
- Employment
