Credit Report basically deals with credit history and other information related with debt records of individual or business organization. The concept of credit report is becoming increasingly important with the growing use of risk-based pricing method. A Short Description of Credit Report The concept of credit report is also known as credit history. It may be described as a documentation of the debt records of a particular person or a business entity. This means that it provides an indication of how a debtor has handled his debt repayments as well as how much money he has borrowed.Information on Credit Report The credit reports contain a wide variety of information regarding the debt records of an individual or a business organization. It shows if a particular debtor has made the payment of his dues at the right time or not by providing the details of occasions where that entity has been late with his payment. The credit reports also provide information on the financial stability of a particular borrower. It shows if that individual or company has experienced bankruptcy or not. The words credit reputation and credit score are also similar to credit report. Uses of Credit Report There are several uses of a credit report. The most basic use of a credit report is that it is used to find out the financial trustworthiness of a particular borrower. It means that through a credit report a lender can judge the financial capability of the debtor with regards to payments.
The biggest users of the credit reports are the various lenders like the credit card organizations for example. For them a credit report is crucial as it helps to take the important decision as to whether they would provide the particular debtor with credit or not. Importance of Credit Report With the advent and gradually increasing use of the risk-based pricing method as far as the monetary services business is concerned the credit reports have only gained in importance. It can also be regarded important, as it is the one factor that comes into consideration when the annual percentage rate is decided upon.
Last Updated on : 9th July 2013