Facts About Credit History

Your credit history is a complete record of your credit-related financial transactions. Student loans, credit cards, mortgages, auto loans, home equity loans and lines of credit all factor into your credit history. The three major consumer reporting agencies -- TransUnion, Experian and Equifax -- keep records of your credit history, known as credit reports. To maintain a healthy financial record, you need to know several facts about credit history.

Credit History and FICO Score

The consumer reporting bureaus use your credit history to determine your FICO score, which is the three-digit number most lenders use to decide whether to extend you credit. If your credit history is "good," meaning that you have made on-time bill payments and kept low credit card balances, your FICO score will be high, according to the Fair Isaac Corporation, the company that developed the FICO scoring model. In contrast, if you have a history of late bill payments, high credit-card balances, charged-off accounts, collection accounts, bankruptcy and foreclosure, your FICO score will be low.

Credit History Length

Having a credit history that spans many years can help you get better rates and terms from many lenders, because they tend to view applicants with long credit histories as more stable than those new to credit. Additionally, the length of time you had specific credit accounts also factors into your FICO score. The Fair Isaac Corporation uses financial history length as a key factor in your FICO score, increasing your score for a long credit history and reducing your score for a short or nonexistent credit history.

Credit History and Employment

In addition to influencing your financial decisions, your credit history can affect your job prospects. Many employers, especially federal and state agencies, government contractors, banks and financial firms and businesses dealing with large amounts of money, run credit checks on applicants as part of their screening and hiring processes, according to an August 2009 article from Liz Pulliam Weston, a columnist for MSN Money. Additionally, companies often run credit checks on applicants for high-level senior positions.

Time Frame

Entries on your credit history will not last forever. Negative credit history items such as late credit card bill payments, defaulted loans, Chapter 13 bankruptcy, collection accounts and foreclosures will fall off your credit report after seven years and will no longer affect your FICO score. Chapter 7 bankruptcy will disappear from your credit profile after 10 years. Positive credit history can also vanish from your profile. Canceling your oldest credit card can reduce the overall length of your credit history if your card issuer decides to stop reporting it to the consumer bureaus.