The whole idea behind credit is the ability to either spend money you do not have, or money you do have but would rather use for a different purpose.
Your credit report / credit history is the record of how you have used your credit. Basically, it tracks your payments on most things that you are issued credit for. This includes your monthly payments for many types of bills: credit cards, car loans, mortgages, student loans, and even cellular phones.
Two of the most important factors that determine how good is your credit history are:
- How often do you pay your bills on time (always, sometimes, rarely, etc.), and
- For what length of time you have had a credit history.
Credit histories / reports are collected by credit bureaus. There are three major credit bureaus: Equifax, Experian, and TransUnion. Each of these credit bureaus is required by law to provide us, once a year, with a free copy of our credit report. Find out how to get your free credit report.
Your credit history is very important, and can be the determining factor when you want to get a new credit card, sign a lease on an apartment, buy a car, buy a home, or even when you apply for a new job!
