Your credit history is a record you've established with the 3 major credit bureaus by either paying or not paying your bills on time, or not paying at all. This history is recorded by all of your creditors on your three credit reports.
The 3 major credit bureaus are Equifax, TransUnion and Experian. They keep this information on file for you, your creditors, new lenders and other interested parties.
Parties that may require your credit history that are not lenders or creditors per se are employers and, more recently (and frightening), doctors and hospitals.
Your credit reports will reflect your payment history on all of your credit accounts you've had for the past.
This includes your student loans, mortgages, retail store credit cards, auto loans, telephone, and utilities (cable, gas and electric); although typically utility companies do not report until you fall into delinquency.
Federal law requires that child support delinquencies get reported.
This information can be reported for up to 7 years, or 10 years for bankruptcies. However, there is no time limit if applying for a loan of more than $ 150,000 or a job with an annual income of more than $ 75,000.
But aside from your credit history, the 3 major credit bureaus also store personal information about you, such as past and present addresses, social security number, and employment history.
The 3 major credit bureaus are for-profit businesses. They make money by selling your information.
You may be asking; how do the Credit Bureaus know if I pay my bills on time or not?
Well, the credit bureaus do not know if and how you pay your creditors. It's your creditors that supply your information to them: it is your creditors that report your payment history to the credit bureaus; good or bad, they run and tell.
Have you wondered how debt collectors are able to find you when you move? One of the ways that debt collectors are able to track you down to your new address is through the credit bureaus.
When you apply for new credit, your information including your address is entered into your credit file. This process is called "lender reporting" where your creditors will send, typically, all three credit reporting bureaus the current status of your accounts utilizing an electronic tape.
Since lenders do pay to make reports they often do not report to all 3 major credit bureaus. This is one reason why your credit report will often differ from bureau to bureau.
Once the credit reporting agencies receive this tape, it's loaded into their system and then unloads into their databases, hence, creating an updated record of all your accounts, address, and payment history.
In the perfect world, all your accounts should be paid on time; however, many of us fall behind. Doesn't matter whether you were hospitalized or near-dead, all your timely payments, late payments, or missed payments are reported.
Accounts in good standing are noted as "paid as agreed." This means that the creditor is reporting your account as being paid according to the terms of agreement you signed.
If your account is past due then your status rating changes and causes your credit ratings drop.
All the 3 major credit bureaus also indicate on your report the name of the creditor, type of account, account number and delinquency status (whether 60, 90 or 120 days late).
The worst notation on your credit bureau report is one that shows that an account is "in collection". But even more devastating are judgments against you, bankruptcies and tax liens.