It is clear, why credit reports are beneficial to banks: they allow credit organizations to avoid unwanted risks when deciding whether to extend credit to the client. But experts say that credit reports are favorable to the mutuary who, having a good credit report, can reckon, for example, on the condescension for delay of the loan, and even on the new credit.
Specialized bureaus collect credit histories for several years. Meanwhile, until now not every borrower understands what the credit history is. Modern Dictionary of Economics provides the following definition of the term “credit history”: “information accumulated during a long time about obtaining and returning bank loans by the borrower; it characterizes the reliability of the borrower in the terms of repayment of the loan, it is used by banks in the decision to grant the credit to this borrower.”
It is clear that it is favorably for a bank to have in possession the information about the borrower’s credit history. The credit report allows to minimize the credits to be given out to unconscientious debtors.
Initially the profit was not as plain as a pikestaff for borrowers. Clients simply apprehended that their data will fall not only in the credit bureau, but in the hands of swindlers. In order to encourage clients to share personal data and information about their loans, the banks have begun to introduce special programs of privileged crediting for trusted customers, convincing them that the credit reports help clients to reduce the cost of the loan.
Special programs for trusted clients require relief from paying a fee, reducing the size of down payment, interest rate reduction and simplification of the procedure of processing the loan. The presence of a good credit report says about honesty and punctuality in meeting the commitments in the past and describes the client’s desire to fulfill his obligations to repay the loan in the future.
However, banks do not often demand confirmation of credit report, prefer to check the reliability of the customer by own forces. In this case, the bank can inquire from the customer an agreement to verify his credit history. If the information about credits provided by the client in the application blank does not match the data of Credit Bureau, the bank asks the customer to bring a bank statement from a credit report.
Those who managed to get a loan for any purpose certainly have to order credit reports regularly. These reports can show you a real picture of your credit but in many cases the reports are very complicated to understand. Here you can make use of credit report monitoring service – they will make the reports easy to understand.
