A credit history or credit report is a record of the borrowing and repaying of an individual.
This will also include information regarding any late payments or bankruptcy. When you fill out
the information required, it is then sent to what is called a credit bureau.
The information is used by various lenders such as banks and credit card companies. They look at
your credit history (or credit report) to evaluate your credit worthiness. This allows them to
evaluate your willingness to repay debt against yourself, and whether to extend credit, as well
as any terms that might apply.
A free publication called Understanding Your Credit Report and Credit Score from the government of Canada provides valuable information
like how to build or improve credit history, and how to check for signs that identity theft has occurred. Understanding credit reports and
scores is important to keeping a good credit rating.
Consumer credit rating are regularily tracked by credit rating agencies. These agencies maintain detailed records
on individuals with information such as payment history, credit limits, high and low balances, and any aggressive
actions taken to recover overdue debts. As this information is quite detailed and sometimes difficult to
follow by a potential lender, the credit scoring method was invented to facilitate evaluating credit prospects.
