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Credit history or credit report is a record of an individual's or company's past borrowing and repaying, including information about late payments and bankruptcy. The term "credit reputation" can either be used synonymous to credit history or to credit score.

When you fill out an application for credit from a bank, store or credit card company, your information is then forwarded to a credit bureau, along with all constant updates on the status of your credit accounts, address or any other changes you have made since the last time you applied for any credit.

This information is used by lenders such as credit card companies to determine an individual's or an entity's credit worthiness; that is, the means and willingness to repay an indebtedness. This helps determine whether to extend crdit, and on what terms. With the adoption of risk based pricing on almost all lending in the financial services industry, this report has become even more important since it is usually the sole element used to choose the APR (annual percentage rate).

Obtaining your own credit report

USA
In the USA, the Fair Credit Reporting Act entitles every taxpayer to one free personal credit report per year and per agency. The following website has been set up for this:
www.annualcreditreport.com

The free reports are available in all states as of September 1, 2005. Although consumers are entitled to reports from all three major agencies at once, it is possible to request one at a time. Staggering the reprots every four months allows the consumer to continue monitoring their credit throughout the year.

How to improve your credit rating

• Maintain a good payment record - It is very important to pay your bills on time. A lot of late payments can lower a credit history record.
• Control of debt - Lenders want to see that you are not living beyond your means. Experts estimate that non-mortgage credit payments each month should not exceed more than 15 percent of your after tax income.
• Signs of responsibility and stability - Lenders perceive things such as longevity in your home and job (at least two years) as signs of stability. Having a respected profession can improve a credit rating.
• Credit inquiries – Keeping credti inquiries to a minimum can help your credit rating as whenever you apply for a credit card, the lender accesses your creidt rating from a credit rating agency as part of the approval process. When your credit rating is accessed, a note is made of this access on the record for two years. Crdit reprot companies perceive many inquiries on your report as a signal that you are looking for loans and will possibly consider you a poor credit risk. To keep your credit rating good, try not to let companies access your history unnecessarily.
• Keep cards you don't use - Although it is believed that having too many credit cards can have an adverse affect on your credit score, closing lines of credit can not improve your score and may even hurt it. The creidit rating formula looks at the difference between the amount of redit you have and the amount you're using, so reducing your total credit can make the balance you carry seem larger and take points off your score.

See also:
• Online Credit and Loan Applications
• Charge Card
• Credit
• Credit Cards
• Credit Report
• Debit Card
• Personal Loans
• Payday Loan
• Credit Rating Agency
• Credit reference agency
• Credit score
• Experian
• Fair Credit Reporting Act
• Identity theft
• Structured Settlement
• Arsidian Introduces New Free Online Mortgage & Loan Calculator

• Auto loan

This article is licensed under the GNU Free Documentation License.
It uses material from the Wikipedia article "Credit History ".