Your Credit
In simple terms, your credit is your reputation for repaying debts on time. If you have good credit, companies and lenders will be more willing to lend money, issue credit cards, hire you, rent to you, or provide more favorable terms on goods and services.

Your credit history doesn't have to be perfect to qualify as "good", but once you establish a negative credit history - it can be very difficult to escape. The surest path to building a good credit history is responsible financial behavior. Likewise, the best cure for bad credit is responsible financial behavior, and, unfortunately, time.

Credit Bureaus
A credit bureau is a company that gathers information about consumers' credit histories, including information about identity, payment habits, and public records. Credit bureaus sell credit reports to potential creditors (banks, finance companies, retailers, etc.) who will then use credit reports to determine a potential customer's creditworthiness.

Credit bureaus gather information regarding identity and credit from creditors (banks, retailers, collection agencies, etc.) Public record information is obtained directly from the court systems.
There are three major credit bureaus in the United States:

• Equifax: (800) 685-1111
• Experian (formerly TRW): (888) EXPERIAN (397-3742)
• Trans Union: (800) 916-8800

Your Credit Report
A credit report is a compilation of personal and financial data for an individual, which has been gathered and maintained by a credit bureau. You have a credit record on file at a credit bureau if you have ever applied for a credit or charge account, a personal loan, insurance, or a job.

Your credit report contains a history of your past and current credit transactions, including any accounts with banks, retailers, credit card companies, and other lenders. It will also include information such as your current and previous mailing addresses, your Social Security Number, your birth year, your spouse's name, and information about your employer. Your report may also contain public record information, such as bankruptcies, tax liens, or any monetary judgments against you.

There are federal laws and regulations regarding how your credit file is used, and who can use the information contained in your credit report. Only companies with a legitimate need to view your credit information (such as banks, mortgage lenders, etc.) are entitled to access this data. Potential employers can access your credit report only with your express permission.

Inaccuracies are bound to occur, due to the shear volume of information processed by the credit bureaus. Any discrepancies on your report may easily lead to denial of credit, so it's important to review your credit report regularly. By detecting and disputing discrepancies, you can help prevent any delays or denials in receiving credit.

Your Credit Score
Credit scoring is a system creditors use to help determine whether to give you credit. After collecting information from your credit application and your credit report, creditors use a statistical program to compare this information to the profiles of similar consumers. Credit scoring systems award points for each factor that helps predict your creditworthiness, or how likely it is that you will repay the loan.
Credit scoring systems vary from company to company, but some common areas of consideration include: your payment history, the amount of debt you owe, the length or "maturity" of your credit history, types of credit in use, and the number of recent credit inquiries on your file.

If you wish to improve your credit score, the best approach is to pay your bills on time, pay outstanding balances, and refrain from taking on new debt. Improving your credit score significantly will probably take some time, so be patient.