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
at woc@epix.net
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.
1950 BC
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.
1763 BC
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
freedom.
630 BC
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
were genuine.
269 BC
Rome - Silver coins were first minted, called denarii.
They were minted and circulated to make Rome a wealthy
city.
1215
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'.
1780
George Washington's Yorktown campaign is financed with a
loan arranged by Robert Morris, who is later imprisoned
for land-speculation debts.
1800
The first U.S. bankruptcy law is adopted in response to
losses suffered by land speculators; voluntary bankruptcy
filings are not allowed until 1841.
1812
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
suit.
1828
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.
1856
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
interest.
1857
In response to scandals and corruption involving loan
sharks, remedial loan societies are created to extend
credit to small borrowers.
1870
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"
1889
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
installment."
1899
Catorand Guy Woolford opened Retail Credit Company in
Atlanta, Ga. which later became Equifax, the first
national credit bureau in the United States.
1900
Canada - First credit union organized in North America.
1903
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
with credit.
1909
Credit unions begin to appear in the United States
1910
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
any installment."
1914
Western Union and some department stores issue the
nation's first type of charge cards, letting people pay
for purchases at month's end.
1919
General Motors launches the General Motors Acceptance
Corp. to help buyers finance car purchases. Ford waits
until 1928 to counter to gain market share.
1920
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
'acceptable'.
1924
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.
1928
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 ?
1945
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.
1946
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.
1949
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.
1950
The Diners' Club introduces its travel and entertainment
card, the first card that can be used at more than one
retail establishment.
1956
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
MATHEMATICALLY
1958
American Express introduces their new charge card. Bank of
America mails the first 60,000 "Bank-Americards" to
Fresno, Calif., residents.
1966
Bank of America begins licensing BankAmericard to other
banks. Rival banks respond by forming the Master charge
group.
1968
TransUnion was created by the Union Tank Car Company, a
railcar leasing operation, which became the parent holding
company.
1969
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.
1970
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
1976
Bank Americard becomes Visa.
1986
Sears launches the Discover Card, offering cards to all
Sears Card holders.
1989
FICO installs the first general-purpose FICO scoring
system at Equifax named BEACON.
1991
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.
1994
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).
1995
For the first time in U.S. history, credit cards overtake
cash payments for consumer purchases.
1997
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.
1999
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.
2001
The WORLD of CREDIT Inc. totally corporate funded Non
Profit Origination providing FREE credit services
including a personal debt management program
2003
George W. Bush signs H.R. 2622, the Fair and Accurate
Credit Transactions Act of 2003
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Jan. 1947 - Total Revolving / Non-revolving credit -- 68
billion
Jan. 2001 - Outstanding consumer debt credit tops -- 1.5
trillion
Jan. 2002 - Outstanding consumer debt credit tops -- 2.1
trillion
--------------------------------------------------------------------------------
SOURCES -- FEDERAL RESERVE DATA / JEROME LEVY - FTC
ECONOMICS INSTITUTE, MANY WEBSITES and U.S. News & WORLD
REPORT
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.