Credit report of a person – is information about execution of loan commitments under obtained credits plus other public information. It is information about if the customer got loans in the past and how he paid them. The credit report also includes discharge of duties to pay for public utilities, contracts of mobile operators, etc. Relative to the other publicly available information – this is mainly data from public registers, such as information about stolen and lost passports.
In the first phase the information about the client’s credit report is collected by financial organizations that gave him a loan (postponement of payment) and hereinafter use this information in case of customer’s re-treatment for a credit. With the consent of the customer financial institutions can send a credit report to credit bureaus. Nowadays not all financial organizations send data about customers’ reports to the credit bureau.
The reasons are varied, but generally retail banks assume the credit report the major strategic informational array, the transfer of which may lead to loss of customer base and allow other banks to raise their profitability (and hence increase their market share) due to the decrease of defaults on clients with adverse credit report.
There are varied procedures of receiving information about the loan subscriber’s credit report. If the bank has a definite market share, first of all it verifies if an applicant obtained a loan in the bank, and if he obtained and now he has a negative credit report – the bank refuses.
Further, if there is a contract with the credit bureau, the bank addresses the bureau. The procedure of address is very simple – query online is sent to the bureau and the answer comes without a peep online. It takes less than 3 minutes.
If an applicant applies for a large sum and there is enough time to make a decision, a bank with notaries can check whether an applicant was in the registers of mortgages in favor of banks. If such information was found in the registry, the customer may be asked to bring a certificate from the bank about the execution of payments.
Many people managed to take a loan for a house or a car, or anything else in those good times. And now they have to pay a definite amount of money each month. To be sure that everything is ok with your loan, use credit report monitoring. Of course, in most cases the things go well but don’t ignore credit monitoring – this is your financial safety.