08-April-2015 written by : FSI-Team
Whoever you plan to take a loan from or take a sum on credit for short term basis, your credit report is thoroughly checked. It is more like your passport or identity proof as a debtor. This credit report is a data compiled through various sources. This credit report talks about how well do you handle your debts, from loans to bills, how you pay your bills, your payment defaults, are there any records of bankruptcy/frauds or not, your credit history and credibility – all such information are recorded in your credit report. This report in a way, guides the lenders in deciding whether they should provide you the amount of loan or not. As a lender you must ask for the credit report without fail, and as a person availing the loan you must ensure that your report is up to date and clear of any defaults.
There are some mathematical formulae used by credit report agencies in order to give you points ranging from 0-1000. These points decide your credit worthiness enabling the lenders to decide whether they should lend you or not. However, it is advisable that you must review your credit report at least once a year
As stated earlier, this credit report is more like an identity proof of yours as a debtor. If you keep checking your report, you will be aware whether you are eligible for loans or not. If you are not then, reading the report will make you aware of the errors; you can then rectify these errors and avail loans in future. The information given in the credit report affects your credibility and hence you cannot afford any mistake like, wrong information or any misspelling in your report. If you check it yourself once in a while, it will be easier for you to gauge the mistake and make the credit bureaus rectify it.
In the times when you have an urgent requirement of finance and your records are clean, in such cases this credit report will serve as a legal document to avail the loan easily. By having a clear and clean credit report, the procedure of loan also becomes less tedious since you already fit into the criteria that can avail the loans.
A clear credit report is vital and checking it once in a year at least is not just your right but also your duty. When you check it regularly, you are actually fulfilling your duty. Your aim should be to have a clean credit report. For lenders, this is the must check document. If you have planned to lend amount to someone, don’t forget to ask for their credit report. The credit report is authorized and a legal document, it is significant to know the credit history of the person whom you are planning to give a loan.