Georgia Student Finance Commission


Borrowing Impacts Credit - Credit History

College Money Matters

Borrowing Impacts Credit - Credit History

A credit history will show the credit worthiness of a perspective borrower. Lenders lend money based on a person’s credit history. In other words, if the borrower is known for repaying past loans as agreed, then the lender is more likely to lend more money at a lower interest rate. 

Borrowing Impacts Credit - Credit HistoryHowever, if the borrower is a risk to lend to, meaning based on past history they show they are unlikely to repay the loan as agreed, then the lender may choose not to lend as much and at a higher interest rate.

How would a lender know about someone’s credit history? Lenders are able to review credit reports from anyone who has borrowed in the past. The credit reports are developed at the three credit reporting bureaus:

Each of these agencies could have a credit report for a borrower. As lenders lend money, they report to any or all of the three bureaus how well the borrower repaid the loan. When a new lender wants to view the borrower’s credit history, they will pull the credit report from any or all three of the bureaus. You want to make sure you are repaying any credit on time and as agreed, so that you are able to borrow again and at a cheaper rate.

You, the borrower, are able to review your credit report as well. Federal law allows a consumer to review each of their credit reports for FREE every year. Request your credit reports from the three credit bureaus at least once per year. Review each credit report for errors and report them immediately to the credit bureaus.

You can visit Annual Credit Report for your FREE report. The credit report does not include credit scores. If you live in Georgia, you are entitled to two additional credit reports at no cost from each bureau.