The individual’s credit report – is information about discharge of loan duties under obtained credits plus other open information. It is information about whether the customer got credits in the past and how he repaid them. The credit report also involves fulfillment of obligations to pay for public service, contracts of mobile operators, etc. As for other publicly available information – this is mainly data from state registers, for example, information about stolen and lost passports.
In the first phase the information about the consumer’s credit report is collected by financial organizations that gave him a loan (grace for payment) and henceforth apply this information in case of customer’s re-treatment for a loan. With the consent of the customer financial organizations can send a credit report to credit bureaus. These days not all financial organizations send data about client’s reports to the credit bureau.
The reasons are different, but basically retail banks consider the credit report the main strategic informational array, the transfer of which may lead to loss of client base and give an opportunity to other banks to raise their rate of return (and hence increase their market share) at the expense of decrease of defaults on customers with a negative credit report.
There are different procedures of obtaining information about the borrower’s credit report. If the bank has a definite market share, first thing it checks whether an applicant received a credit in the bank, and if he received and now he has a negative credit report – the bank denies.
Further, if there is a contract with the credit bureau, the bank contacts the bureau. The procedure of address is very simple – inquiry online is sent to the bureau and the answer comes at once online. It takes less than 3 minutes.
If an applicant applies for a significant amount and there is enough time to make a decision, a bank with notary officers can check if an applicant was in the registers of collaterals in behalf of banks. If such data was found in the register, the person may be asked to bring a certificate from this bank about the execution of payouts.
Not very long ago loans were affordable to many people and they didn’t miss this chance. To be on the safe side they have to check their credit reports. This is very useful task but it may seem hard for somebody. It is possible to use credit monitoring service – they will help you to understand the reports clearly.