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Credit history refers to a consumer's past credit actions. Detailed on a credit report, it is a consumer's record of incurring and repaying debts. A credit score is a numerical expression of a consumer's creditworthiness, which is derived from elements in a consumer's credit history.

The most commonly excepted consumer credit score is a FICO Score. Created by the Fair Isaac Corporation, this score weighs a consumer's payment history, amount of debt, length of credit history, new credit and diversity of past credit to create his or her credit score.

Payment history and amounts owed are given the largest amount of weight, accounting for 35% and 30% of the score, respectively. Length of credit history accounts for 15% of the credit score, and new credit and diversity of credit account for 10% each. Information from each of the three major credit reporting bureaus (Experian, Transunion and Equifax) is used to create the FICO score, but only information from the last seven years is used.

In most cases, information that is over seven years old is removed from your credit report. If you made a late payment, had a bill go to a collection agency or declared bankruptcy, those negative marks are removed from your credit report after seven years. However, Chapter 7 bankruptcy can stay on a report for up to 10 years, and tax liens may also stay on your report.

To create a detailed credit history of a consumer, credit reporting bureaus collect information from creditors on amount of money borrowed, type of loan, date account opened, late or timely payments and recent credit inquiries. In addition to creditors, courts, collection agencies, landlords and utility companies may also send information to the credit reporting agencies, and as a result, consumers may have information about bankruptcies, liens, judgments or collections accounts on their credit reports.

To determine the creditworthiness of an individual, a lender may read his or her credit history or credit reports. However, a credit score gives lenders a snapshot to easily and quickly assess a borrower's credit history and thus his or her future creditworthiness, without having to read every element of the credit report.

FICO credit scores range from 300 to 850, but scores must be over 650 to be considered good or excellent. Scores lower than 659 are considered to be below average. A score in this range indicates that you have had trouble repaying debts in the past or that you have too much open credit or too much recent credit. A score between 660 and 724 indicates that a borrower has a relatively long credit history and a mostly positive history of loan repayments. Scores above 720 indicate that a borrower is dependable with a solid credit history.

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