Compiled by John J. Hudock, Founder and
President of the World of Credit. John has been
compiling this information since 1998. You may contact him
The practice of credit probably corresponds to when man
began to communicate. The earliest I could conform was
about 4000 years ago and the reference was to interest
rate. Thousands of years ago the leaders were concerned as
to what excess interest would do to the economy.
One of the first recorded references to credit - the King
of Eshnunna (east bank of the Tigris) decreed a limit on
amount of interest - 20% - and allowed borrowers grain and
goods for loans made in silver.
Hammurabi - King of Babylon (Code of Hammurabi) also
limited interest to 20%. A borrower could also sell his
wife, son or daughter into slavery to settle debt. He
added protection for those sold indentureship to three
years - in the fourth year they would be given their
Lydia - The first coins appeared in this small kingdom
which was between the Black and Mediterranean Seas. The
coins were oval minted - stamped with the image of a
lion's head. The lion's head image guaranteed the coins
Rome - Silver coins were first minted, called denarii.
They were minted and circulated to make Rome a wealthy
Italy - Modern banking developed in northern Italy. The
first bankers were money changers sitting on small benches
in the market place. The word 'bank' is derived from the
Italian word for 'bench' - 'banco'.
George Washington's Yorktown campaign is financed with a
loan arranged by Robert Morris, who is later imprisoned
for land-speculation debts.
The first U.S. bankruptcy law is adopted in response to
losses suffered by land speculators; voluntary bankruptcy
filings are not allowed until 1841.
New York's Cowperthwaite & Sons begins selling furniture
on "installment," allowing consumers to take items home
while paying them off over time. Competitors soon follow
New York - Pawnbrokers began offering collateral loans.
Open-book credit was used to purchase inexpensive items
such as food and clothing. These items would be paid for
'bit by bit' as buyers could afford to.
I.M. Singer & Co. launches an installment-selling campaign
allowing "suitable" buyers to take home a sewing machine
for $5.00 down and monthly payments for the balance, plus
In response to scandals and corruption involving loan
sharks, remedial loan societies are created to extend
credit to small borrowers.
Chicago - The first small-loan company opened. It provided
cash while charging extremely high interest rates. For the
next 40 years loan company activity grew and so did their
interest rates. Because of this Lawmakers passed
legislation allowing formation of "Credit Unions"
Installment plans - the term is listed in a dictionary for
the first time. The definition warns that merchants can
repossess goods "if the buyer makes default in any
Catorand Guy Woolford opened Retail Credit Company in
Atlanta, Ga. which later became Equifax, the first
national credit bureau in the United States.
Canada - First credit union organized in North America.
Department store charge cards were introduced to be used
for luxury goods. The cards were convenient because people
did not have to carry large amounts of money. Also at this
time automobile sales increased - the cars being purchased
Credit unions begin to appear in the United States
The Sears catalog decries the "folly" of buying on credit.
A year later, Sears abandons its cash-only policy and
starts installment selling for fear of losing "default in
Western Union and some department stores issue the
nation's first type of charge cards, letting people pay
for purchases at month's end.
General Motors launches the General Motors Acceptance
Corp. to help buyers finance car purchases. Ford waits
until 1928 to counter to gain market share.
The modern credit card makings were here. Oil companies
had offered charge cards that could be used nationwide.
Auto buying habits indicated that buying on time would be
Three of every four automobiles purchased in the United
States are purchased on credit. These loans make up more
than half of all retail installment sales.
Credit Plus started as credit bureau Del Mar Va, It was
purchased by Steve Grants in 1980 and changed the name to
Credit Plus in 1998 ?
In Europe, millions of people used cigarettes, chocolate
and chewing gum which were gifts from U.S. soldiers to
barter in place of the money they did not have.
Formation of Informative Research. Headquartered in Garden
Grove, CA. it is a privately held information provider,
servicing the mortgage lending industry. It is one of the
top ten credit resellers in the U.S.
New York City - The 'modern day' credit card came to
existence in a restaurant where three men were having
lunch - they started the "Diners Club" card.
The Diners' Club introduces its travel and entertainment
card, the first card that can be used at more than one
FICO - Fair Isaac Company -- Founded by Bill Fair & Earl
Isaac. They developed a scoring system using a combination
of item scoring, factoring & segmentation - which can
predict an individuals potential credit default risk
American Express introduces their new charge card. Bank of
America mails the first 60,000 "Bank-Americards" to
Fresno, Calif., residents.
Bank of America begins licensing BankAmericard to other
banks. Rival banks respond by forming the Master charge
TransUnion was created by the Union Tank Car Company, a
railcar leasing operation, which became the parent holding
TransUnion acquired the Credit Bureau of Cook County (CBCC).
At that time, the Bureau manually maintained 3.6 million
card files in 400 seven-drawer cabinets.
President Nixon bans mass mailings of unsolicited credit
cards, forcing banks to ask customers if they actually
want a card before delivering one.
FICO develops the first scoring system for a bank credit
card of Connecticut Bank and Trust.
The Federal Trade Commission (FTC) enacts the Fair Credit
Reporting Act (FCRA), 15 U.S.C. ' 1681 et seq
Bank Americard becomes Visa.
Sears launches the Discover Card, offering cards to all
Sears Card holders.
FICO installs the first general-purpose FICO scoring
system at Equifax named BEACON.
FICO begins their risk scoring system at all three
national credit Bureaus. - BEACON (sm) at Equifax,
EMPIRICA' at Trans Union, and the Experian/Fair Isaac
model at Experian.
The Mortgage Press begins publishing - The Mortgage Press,
LTD. has 36 monthly publications targeting the mortgage
industry. professionals and serves as the official journal
of the state affiliate of The National Association of
Mortgage Brokers (NAMB).
For the first time in U.S. history, credit cards overtake
cash payments for consumer purchases.
Russia - Licenses for elk hunting permits were used to pay
public employees because the opportunity to hunt for food
was more valuable to them than money.
The International Credit Club - established - W-B Pa. for
the purpose of improving credit scores for purchasing and
refinancing properties. Evolved into web based interfaced
mortgage pre qualification program.
The WORLD of CREDIT Inc. totally corporate funded Non
Profit Origination providing FREE credit services
including a personal debt management program
George W. Bush signs H.R. 2622, the Fair and Accurate
Credit Transactions Act of 2003
Jan. 1947 - Total Revolving / Non-revolving credit -- 68
Jan. 2001 - Outstanding consumer debt credit tops -- 1.5
Jan. 2002 - Outstanding consumer debt credit tops -- 2.1
SOURCES -- FEDERAL RESERVE DATA / JEROME LEVY - FTC
ECONOMICS INSTITUTE, MANY WEBSITES and U.S. News & WORLD
This brief credit history contains information from many
sources. It is intended to illustrate the History of
Credit as interpreted by John J. Hudock - from the first
known record to the present highlighting dates and other
events he considered interesting.
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.