A credit report provides a guide to lenders in predicting risk, in particular if you will pay back your creditor in full. Like your report card in school, your credit report is something you can manage and control.
Some inputs into your credit report are your credit card and retail account history (such as department store credit cards), installment loans (loans where you make regular monthly payments, like car loans) and mortgage loans. Other inputs include public record and collection items, such as delinquency payments on utility bills that are sent to collection agencies, bankruptcies, foreclosures, lawsuits, wage attachments, liens and judgements.
Lending institutions such as banks and credit card companies will extend credit to almost anyone, dependent on approval. It’s a tool that you’ll want the option of being able to use, because your credit history is central to having access to affordable credit.