When consumers seek financing for their investments, mortgages and personal expenditures all credit approvals will be adjudged on a consumer's credit history.
All applicable financial institutions that by law are allowed to lend such as banks use a persons credit history(which is a score compiled on a persons previous credit) in the process for approving there loans . These financial institutions evaluate the potential risk by providing the recipient a loan and the probability that the they would be pay it back including mitigating the potential loss due to the inability of loan recepient to pay back the loan.
In particular your credit history is a reflection of information that creditors have reported to credit bureaus, eg if you had bought a car or tv from financing options. Credit bureaus can legally report poor payment information for about 7 years and for bankruptcies for about 10 years.