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What is your credit history?

By Cait Flanders

When I was 19 years old, I applied for my first credit card. As a student, I only wanted a basic, no-frills card with a $500 limit, for the sole purpose of building my credit history. What I didn’t realize, at the time, was that my credit history was created on the same day I submitted that application.

What’s your credit history?

If you’ve ever applied for or used credit (for example, credit cards, car loans, personal loans, mortgages) you have a credit history. It’s one piece of the puzzle that makes up your full credit report, and specifically shows your ability to repay debts.

Your credit history is the summary of how many times you’ve applied for and used credit in the past, as well as specific details about each account, including:

  • When you opened the account
  • What your current balance is
  • How many payments you’ve made on time
  • How many payments you’ve missed 
  • Whether the account is still open or has been closed (or fully paid off)

Some cell phone and internet companies may also report your payment history to the credit reporting agencies, which means you could find information about those accounts in your credit history as well.

And if you’ve ever had any accounts get sent to collections or filed for bankruptcy, that will also be included.

What’s NOT included in your credit history?

While you might think that all bank products and accounts are attached to your credit history, it’s important to remember that only credit accounts are included. That means the activity on your chequing accounts and savings accounts aren’t reported to the credit reporting agencies, unless the account was closed “for cause” (you owed money on it or you’d opened it fraudulently).

How do the credit reporting agencies use your credit history?

Your credit history is combined with some of your personal information (your name, date of birth, address, phone number, employment information, social insurance number) and compiled by the credit reporting agencies, TransUnion and Equifax, into what’s known as a credit report.

The information in your credit report is then used to calculate your credit score. If you maintain a healthy credit score, you may be eligible for “better interest rates and terms for mortgages, auto loans, credit cards and personal loans,” says Heather Battison, vice president for TransUnion.

What should you do if you find mistakes in your credit history?

The information included in your credit history is sensitive in nature and should be accurate.

Errors can not only lower your credit score but also make it look like you’re not a responsible borrower, which could give future creditors reason to charge you higher interest rates or decline applications altogether.

For this reason, it’s important to check your credit report regularly, to make sure there are no mistakes that could be damaging your credit history as a whole.

It’s also important to check your credit history regularly because it can show you if someone has made an attempt to steal your identity and open new credit accounts under your name. Specifically, you would look at the inquiries and payment history to try to figure this out.

“If you don’t recognize an inquiry on your credit report, it’s important to double check that the activity was unauthorized,” Battison says.

Once you’re sure the inquiry is unauthorized, you should place a credit file alert on your account on your reports. Both TransUnion and Equifax offer this service, which requires the creditor to check in with you first before granting credit. However, it doesn’t prevent creditors from viewing your credit report data.

Once you’ve placed the credit file alert, you should file an official dispute.

You can submit disputes over the phone or in writing with TransUnion or Equifax directly. Each credit reporting agency has its own dispute process and if you see an error on one report (for example, Equifax), you’ll want to check your credit history with the other reporting agency as well in case you need to file a dispute with both bureaus.

Both credit reporting agencies also offer fraud alert services that can help you detect fraudulent activity on your reports in the future.

Bottom line

The information in your credit history is extremely important. In fact, it could be considered one of the most important tools in your financial wallet.

To help maintain a clean history, only open the accounts you need, make all your payments on time, and check your credit score and report regularly to ensure there are no mistakes.

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