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What Is Credit History?

Published October 31, 2022
5 min read

Key points about: The definition of credit history

  1. Your credit history is a summary of your experience managing credit accounts and debts

  2. Credit history is important because it is used by credit card companies, mortgage lenders, landlords, and employers to determine creditworthiness and risk

  3. Your credit score is based on your credit history, but the two are not the same thing

If you’re applying for an additional credit card, seeking additional funds with a loan, or other ways to expand your credit, you may need to review your credit score to assess whether you’ll be approved. Or you may be applying for a credit card for the first time and want to know how important your credit history will be for your financial future.

If you’re curious what credit history and credit scores are, review this guide to help you better understand these important financial terms.

Definition of credit score and credit history

What is a credit history, and what is a credit score? These are two important concepts that can impact a person’s finances but can be difficult to understand.

Here, we’ll break down what you need to know about credit history and credit scores, and why they are important.

Credit history

Your credit history is the information recorded about your experience managing credit accounts and debts. Someone with a good credit history might be eligible for favorable loan terms and flexible account types. Meanwhile, someone with a poor credit history might be subject to higher interest rates.

Your credit history is displayed on your credit reports as a list of companies that lent you money, activity on those loans, status of various financial accounts that are in your name, and more. Your creditors (banks, lenders, utility companies, etc.) report this information to credit bureaus.

Note: There are three major credit bureaus: Experian, Equifax, and TransUnion. Your credit history may be different at each credit bureau, because some creditors may not submit information to all three.

Your credit history includes:

  • The number and types of credit accounts you have open, such as credit cards, mortgages, student loans, and car loans
  • How long your credit accounts have been open
  • Your credit utilization ratio, which is calculated by dividing your outstanding balances by your total credit limit
  • Whether or not you’ve made on-time payments
  • The number of recent hard credit inquiries
  • Any bankruptcies, collections, judgments, or liens.

Credit score

Not to be confused with a credit history, a credit score is a three-digit number that reflects a consumer’s creditworthiness. Your credit score is calculated based on your credit history, and it can vary depending on which credit bureau you get your credit score from. This is because each uses their own credit scoring model and, as noted above, may have different information they are using to calculate your score. Some credit scoring models are more widely used than others. For instance, 90% of top lenders use FICO® Credit Scores.

Why Your Credit History Is Important

Credit history is important because credit card companies, mortgage lenders, landlords, and employers will use this information to assess your creditworthiness. Basically, they want to understand how you’ve managed your financial commitments in the past to determine whether you’re someone who they could trust with a loan of money or property.

These businesses may pull your credit history and credit score to determine the risk of working with you and decide which products and terms you’re eligible for. Let’s review what a good and poor credit score may indicate, as well as if you have no credit history.

Good credit score and history

Lenders may review the specifics of your credit history to see what kinds of accounts you’ve had in the past and how long you’ve had them, in addition to looking at your credit score. A good credit score can help you get approved for lower interest rates and more credit options. A high credit score (which is based on your credit history) tells lenders that you make on-time payments, responsibly maintain your accounts, and keep your credit utilization ratio low. According to FICO, most lenders consider a “good” FICO® Credit Score to be 670 or higher.

Poor credit score and history

A low credit score and poor payment history, on the other hand, show lenders that it may be risky to work with you, because it suggests that you might have difficulty making on-time payments and managing debts. As a result of this increased risk, poor credit history may lead lenders to offer higher interest rates and lower credit limits.

If you’ve had trouble managing your finances in the past, and have accumulated a poor credit history, it can be hard to get new forms of credit. But it’s not impossible. If you want to build your credit history and stay on top of your credit score, you might consider using a secured card like the Discover It® Secured Credit Card.

No Credit History

As difficult as having a poor credit history is having no credit history, This can happen if you have never had a bank account or borrowed money in your own name, among other things. If a lender can’t review your credit history, it’s less likely to lend you money.

If you have no credit history, it’s a good idea to open your first accounts to start building your credit history. While it may be difficult to be approved for certain leases and loans, there are ways to get a credit card with no credit history.

You can start building your credit history, for example, with a secured card or, if you’re enrolled in college, with a Discover student credit card. Making on-time monthly payments and keeping your balance low can contribute to a strong credit history.

What’s in Your Credit History?

Your credit history contains a wealth of important information about your financial standing. It’s a good idea to check your credit history in order to track your progress and meet your financial goals. You can access your credit report and credit history for free at

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