Credit report – is a credit file on the individual or company. Credit report can be viewed in a special report, which the credit bureaus draw up and update.
You can obtain the following information from the credit report:
- The number and size of current and repaid loans;
- History of repayment of loans (timeliness of payments, lateness, failures to pay);
- An amount of current debt;
- The total length of credit report;
- The record of the bankruptcy;
- The list of companies that made the request in your name.
Why is the credit report necessary?
For banks the state of a person’s credit report allows to estimate a measure of financial risk when lending money to him. I.e., the credit report creates a measure of confidence to the borrower. It is easier to lend money to a man about whom we know that he returns money in time when lending than to a man about which nothing is known.
In this regard, people (and companies) who have a good credit report can obtain a bank loan for a lower rate than people who have a bad credit reputation.
The absence of credit report:
- It complicates the process of obtaining the credit cards and other types of loans;
- When obtaining the credit, its terms will be more expensive than for a person who has a good credit report;
- When purchasing or leasing a real property, the owner can change his mind about the amount of deposit in the big side.
Who is collecting information for the credit report?
Credit bureaus collect it. They also make credit reports and update the information in them. It should be noted that banks and other lending institutions send reports periodically (usually once a month) to credit bureaus with information about changes in the accounts of their clients.
To eliminate confusion, in the U.S. there is a system of complete identification of people, by assigning an individual Social Security number to each person. It is difficult to identify the credit report with a particular person without such a number, because each of us can have persons bearing the same surname.
In accordance with U.S. federal law, every person residing in the U.S. and having a Social Security Number is entitled to get free the credit report from three credit agencies once a year.
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