According to the definition that economic vocabularies offer the credit report – is information about what credits the borrower took in the banks and how punctually loan repayment was carried out.
In fact, credit report – is electronic file containing information about the borrower and the financial data that are directly related to the implementation of credit obligations. The credit bureau – a legal entity, created specifically for these purposes – forms the credit reports. The credit report is formed not only for account of the data provided by the bank, but from the information extracted by the Bureau from public sources, registries and databases, except ones containing a state secret. In law, public authorities are obliged to provide all these data on the first request to the credit bureau. If the borrower has delayed payments on loans, litigation, and the facts of early repayment – all this will also be reflected in his credit profile.
In the old world practice no one has thought about the automated assessment of the borrower, until the banks needed to handle many high-risk loan applications and there was no need to open credit lines in several banks. This situation undermined the bank’s estimates of riskiness of giving the loan and led to the exchange of information about borrowers and then to the creation of credit bureaus. The largest and most famous in the world are «Equifax», «Experian», «Scorex» and «TransUnion».
Over time, cooperation of banks with the credit bureau has evolved significantly. For example, now in U.S. credit bureaus use special techniques to make a certain numerical score that indicates his reliability from the borrower’s data. In calculating the score it is taken into account the parameters such as the existence of children, marital status, earnings, but its technique is completely closed and guarded carefully.
The score of a specific borrower has a big impact on the relationship with the bank: the borrowers with better credit score can obtain new banking products under a lower rate and better terms. Therefore, taking care of your credit score is an integral part of the reputation for most people in the U.S. and Europe. In particular, in the U.S. it takes 7 years of irreproachable conduct of the borrower to fix the credit reputation.
Do you still remember those good times when anybody could take a loan if one required cash? And just imagine the situation of those who have to carry that burden nowadays when the world economy is facing tough times. And for those people having loans the matter of credit report monitoring is as urgent now as never before. It is not only about credit control, this also allows to save money, time, and nerves and be quick in solving loan related problems. Those who are looking for a spot where to learn about credit reports, are welcomed to visit this credit monitoring site – there is lots of information about loan monitoring and how to order that service.
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