What Is The Credit History And Why It Is So Important?

What is the credit history and why it is so important?

Let us find out what does the concept of credit history mean and whence the credit history undertakes?

Concept of “the credit history” began is a matter specially designed for increase of degree of security of legitimate rights and interests of creditors (banks) and borrowers has been accepted.

The credit history represents the complete information about what when and in what banks the borrower took credits and how much properly he carried out his credit obligations (paid the credit) to the creditor (bank).

Data for a credit history of the borrower is given exclusively with the consent of the borrower, those banks which at various times granted to the borrower the loan or credits. The credit history periodically replenishes with the new information as the borrower arranges or repays credits in various banks.

The credit history is stored in specialized bureaus of the credit stories which work is strictly regulated by the legislation of the Russian Federation.

Bureau of credit stories – as a rule, the private institution having the status of the legal entity which is engaged in collection, handling, storage and if it is necessary distribution of data which concern a credit history of the borrower.

For what the credit history is necessary?

Availability of credit history of the borrower considerably simplifies activity of commercial banks, considerably reducing risks for both parties participating in crediting process and the most important thing that the credit history serves as rather effective mechanism of the control and influence on borrowers.

At circulation of the citizen in bank behind the next credit, the employee of bank brings the data given by the potential borrower in the computer and sends inquiry in bureau of credit stories with the request to give credit history of the given citizen. Proceeding from the analysis of provided data, the creditor (bank) makes the decision on that, to grant the loan to the citizen or to refuse giving it to him.

If the citizen has good credit history he can count on soft terms of credit granting and the minimum percent for its repayment.

If the credit history contains data on infringement of terms of payments under the previous credits taken in other banks or other negative information it doesn’t mean that the credit won’t be given to him.

In a similar situation, the bank can make the decision for benefit of issue of the credit to the citizen, but for example, with the raised interest rate or will suggest to give for secure the supplementary information, such as a salary level, a length of service, or something other.

Thus, the credit history becomes stimulus for the borrower to diligent accomplishment of the debt obligations before bank.

Do you still remember those good times when everybody could take a credit if one required funds? And just imagine the condition of those who have to carry that burden nowadays when the world economy is facing tough times. And for those people having loans the question of credit monitoring is as crucial now as never before. It is not only about credit control, this also helps save money, time, and nerves and be fast in solving loan related issues. Those who are searching for a place where to learn about credit report with score, are welcomed to check out this credit report monitoring site – there is much information about credit monitoring and how to order that service.

In addition we haven’t forget about possibilities provided to us by modern technologies. The Internet network provides us with a truly unique opportunity to find what we require or to get anything at the best price on the market.

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