Credit report

Credit report

Credit report

Credit report or history is, in many countries, individual's record or company's past information on borrowing and repaying, including information about delayed payments and bankruptcy. The term "credit reputation" can be use to credit history .

In the U.S., when a customer fills out an application for credit from a bank, credit card company or store.The information gotten, is fowarded to a credit bureau.It is the duty of credit bureau to matche the name, address and other identifying information on the credit application.The information is retained by the bureau in its files.That's why it's very necessary for creditors, lenders and others to provide accurate data to credit bureaus.This information material is used by lenders such as credit card companies to determine an individual's credit worthiness;this is, determining an individual's willingness to repay a debt. The willingness to repay a debt is shown by how timely past payments have been made to other lenders. Lenders like to see consumer debt obligations paid on a monthly basis.

There has been much discussion over thelevel of accuracy of the data in consumer reports. However, the only scientifically researched studies that include sample sizes large enough to be valid have concluded that by and large the data in credit reports is very accurate. The credit bureaus point to their own study that millions of credit reports given are accurate. The Consumer Data Industry Association testified before Congress that less than two percent of those reports that resulted in a consumer dispute had data deleted because it was in error.

If a consumer disputes some information in a credit report, the credit bureau has days to verify the data.Great percentage of these consumer disputes are resolved within two weeks and then the consumer is notified of the resolution. The Federal Trade Commission states that one large credit bureau notes a very high percentage of those who dispute an item seem satisfied with the outcome.

The other factor in determining whether a lender will provide a consumer credit or a loan facility depends on income. The higher the income, all other things being equal, the more credit the consumer can access. However, lenders make credit granting decisions based on both ability to repay a debt (income) and willingness (the credit report) as indicated in the past payment history.

These factors help lenders in determing whether to extend credit or not and the terms envolved. With the adoption of risk-based pricing on almost all lending in the financial services industry, this report has become even more important since it is usually the sole element used to choose the annual percentage rate (APR), grace period and other contractual obligations of the credit card or loan.

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