Credit History Is More Important Than Credit Score

January 01, 2022

When applying for most loans, lenders will be sure to focus on your credit score – a three-digit number that plays an important role in qualifying you for loans, credit cards, apartment rentals, and more. However, your focus should be placed on something else instead: your credit payment history.

Your credit payment history is the most important factor affecting your credit score. Plus, unlike your credit score, it’s something you can actually review and manage on your own. In fact, here are four important steps that you should complete:

Step 1: Order a Credit Report

Getting a copy of your credit report is the best way to view your credit payment history.

The best way to do that is by visiting the government-authorized website annualcreditreport.com. You can go there to order a free credit report from any of the three big credit-reporting companies. Those companies are Equifax, Experian and TransUnion.

Step 2: Review Your History

Once you get a copy of your credit report, be sure to study your credit payment history. You’ll want to look for:

  • Inaccurate personal information
  • Unrecognized credit, loan and household-bill accounts
  • Incorrect payment history entries
  • Any inaccurate account status (such as a closed account marked as open)
  • Incorrect credit limits and balances
  • Any other errors
  • Any unresolved debts (overdue balances that remain unpaid and may even be flagged for collection)

Your findings will tell you what kind of action you may need to take.

If you determine your history is accurate and positive, you can take comfort in knowing your credit score will reflect that. No action is necessary. You can skip Step 3 below and move on to Step 4.

However, if you see any blemishes, such as inaccurate entries or unresolved debts, those could have a negative impact on your credit score. Move on to Step 3 below.

Step 3: Repair Your History

You’ll want to address any credit information that is inaccurate or unresolved.

  • If your credit report lists any incorrect items, be proactive. Contact the credit reporting company that supplied your report and request to have those items corrected. You also will need to contact each business that supplied wrong information, in order to request a correction. (For more detailed instructions about how to dispute errors, visit this Federal Trade Commission web page: https://www.consumer.ftc.gov/articles/disputing-errors-your-credit-reports.)
  • If your credit report lists an unresolved item, then take action to remedy the situation. For example, if your report lists an open collection action, contact the creditor. Ask if you can negotiate for either new payment terms or a total payment that is less than what you actually owe. Then follow through with the new plan and pay down that debt as quicky as possible. This will help clean up your credit history so that you can apply for new credit with confidence.

Step 4: Keep Checking Your Credit History

Continue to order free copies of your credit report. Then compare each new report with your previous reports. You’ll want to make sure the reported information is accurate. That’s because it's always easier to correct inaccuracies sooner rather than later.

Do You Want to Get on the Road to Owning a Car or Home?

Building a more perfect credit history is key to making that happen. However, at Heartland Bank, we understand that financial situations can be very unique from one to another. It's why we offer our Money Matters Small Dollar Loan Program, which can assist you in building or repairing your personal credit.

Interested? Sign up for a class - offered year-round, both online and in-person!


This content is for informational purposes only. Readers should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific advice from their own counsel.