Credit is a fact of life for most Americans and the choices you make about how you use your first credit card, or handle your first loan, can change your life for years to come through your credit report.

What is a credit report? Your credit report tracks your bill paying habits, or credit history. A credit report lists your car loans, credit cards, mortgages, school loans, and all other loans you borrow from a bank or finance company. The credit report also tracks rent payments and severely delinquent bills that get turned over to collection agencies. This is why utility, medical and phone bills sometimes appear in a credit report. Information from public records such as bankruptcies and unpaid tax bills also appear in a credit report.

So, why is a good credit record important? Think of your credit report as a second resume or a school report card and you begin to understand its importance. The credit report details your credit history and financial reliability. Your credit report determines if you qualify for a loan and what your interest rate will be. The better your credit history, the lower your interest rate.

But, who looks at my credit report? Your bill-paying habits will be reviewed anytime you apply for a loan or credit, an apartment, some jobs, and insurance. Rent disputes with former roommates that leave the landlord short are likely to appear in your credit report and damage your credit history. Unpaid bills for the computer you bought after opening a store charge card are also likely to appear in your credit report.

The key to maintaining a good credit history is to repay your loans on time. Negative information will remain in your report for seven years and bankruptcies remain 10 years.