A
credit
report
is a piece of information that contains the credit (borrowing)
history. Lenders provide their information regarding a person’s
credit history. This contains detail regarding how that individual
has repaid the loan amount and other relevant information.
The
term credit is derived from the Latin word ‘creditus’ which means
to trust. The concept of credit has developed with this notion of
trust. The lender lends money to the borrower with a signed contract
that the latter will repay the money within a stipulated time as
agreed before by both the parties.
The
term credit has become a catchphrase these days. People now-a-days
opt for credit every now and then. The prime mode of transaction
these days are made via cards. Mostly credit cards. There are a few
sites that provide the history of a customer’s credit background.
Some of these sites are Experian, Equifax, Trans union.
Most
of the things today starting from cable and electricity bills to
personal loans, job applications and others, people gauge the credit
rating. Hence it is always a wise thing to maintain good credit
history. One should ensure that his spending are under control, one
should try to avoid unnecessary debts, make on time payments and
other things that makes his credit history a reliable one.
One
should always try to remain clean in his credit transactions. The
cost of everything has risen steeply over the last few years. People
might need to go for a credit in certain emergency situations, such
as in cases of a crisis or a health condition. The sudden requirement
of money can then be sufficed by credit providing organizations. If
the credit
report
of a person is bad, credit institutions will refrain from providing
loans.
Once
a report is damaged, it bears that information for the next seven to
ten years. This depends on the amount of debt that has been taken by
the borrower.
A
report is not made until it is asked for, either by a lender or by
the borrower. On demanding the report it is compiled by the reporting
agency. This is then given to the one opting for it. This information
is collected from several lenders, shopkeepers or others with whom we
have dealt in credits. All this information are tailored together to
make a complete report. That reflects the credit history of a
customer or lender. The information includes several things like the
way the borrowers use their accounts.
The
files of millions of borrowers are maintained by the agencies. This
information is bought by lenders who would be making their credit
decisions. A credit history comprises a lot of information, it
includes whether the customer has duly paid his bills, the time
length of his accounts, the type of credit he uses and also whether
he is looking for new credit providing sources. This provides a
lender with a holistic knowledge about the potential borrower.
The
reports are generally classified into four parts, these are
- Credit history
- Inquiries
- Public records
- Personal identification information
Therefore
a borrower or a customer should be careful while dealing in credit
transactions. A petty mistake or ignorance can have a negative
imprint on the minds of the lenders.
Author
bio – Jimy Jones has worked with credit providing institutions for
a long time. He has provided his knowledge regarding credit
report
in this article. For more information Please visit creditreport.org
