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What is a credit history?

You may wonder how you happen to acquire a credit history. Let's say you take out your first student loan. At that time you are building a credit history. Your loan is reported to the credit bureaus before you begin repayment. New scoring models for credit histories now also have begun to include rental history and utility payments.

You can check your credit history by requesting a credit report. Three credit bureaus are required by law to give every consumer one free annual credit report: Transunion, Equifax, and Experian. If you find that you do not have a credit report, then you have no credit history. That's okay if you are a freshman college student, but now is the time to start building your credit history.

Get your free copy at

  • Be sure you know all your accounts as each one will require verification.
  • You can request reports from the three credit bureaus at one time or stagger your requests throughout the year, e.g., three requests, each one made four months after the other.
  • You can order your credit score along with your report at this time but you will be required to pay an additional charge.
  • If you need more than one copy per year from each agency, you will be required to pay a small fee (usually $9).

Now that you have your report in front of you, here's a simple translation. Your credit report is a list of your financial history. Review your entire report carefully to check for accuracy.

Interpreting your credit report

You will first see personal information listed, including basics like name, address, and employment. None of this data is included in your credit score.

Next, you will find your credit summary, a listing of all your accounts that are called tradelines. Here is where your credit card and loan accounts are listed. The list reports the total number of accounts in your name; the types of accounts: revolving (credit cards) or installment (loans); and the total outstanding balance for each of the accounts.

Then, the account history demonstrates whether you pay your bills on time consistently. Remember, one late payment will appear on your credit report for seven years. Any public records, bankruptcy, collection accounts, liens, and lawsuits are listed here. This documentation can remain on your report for 10 or more years.

Finally, all credit inquiries from other companies or agencies are reported and noted each time you apply for credit.

Clean up errors

Are old accounts listed that you no longer use? Did you find anything unrecognizable? Be sure to dispute anything that doesn't look correct.

Not sure how to dispute? Each of the national credit bureaus provides instructions for disputing information the bureau has reported about you: