A credit report can be regarded as data compiled about the credit history of an individual or an organisation. It includes information such as the number creditors, how much credit they have accumulated, when the debts were due to be paid and when it was paid back.
Held by credit bureaus, a credit report is the easiest way for lenders to assess how well an individual or organisation has handled its debt obligations.
For Tiffany, understanding her credit report can prove to be highly useful. As someone interested in becoming a model consumer, taking the time to understand this report is the best step she could take towards this.
These reports can be quite detailed and lengthy.
Tiffany needs to know that a credit report provides all the information she can think of, relating to her credit behaviour. This means that it gives information about every credit obligation she has had.
It also shows how much she owes to creditors, along with when the money is due to be repaid. Included here is information about any payment defaults, which stay on record for two years.
Any late payments and non-payments are also included. Any debt that has been incurred over the past 24 months is included in the report. Tiffany can use this information to her advantage, by making sure that she pays any outstanding debts off.
Discriminatory information such as race, religious beliefs or sexuality is not included in credit reports.
Credit scores are between 300 and 850 and summarise credit behaviour without lenders having to pore through everything in the reports. A score of below 620 is regarded as negative. These scores are useful summaries for credit providers who are assessing applications for finance.
Reviewed by lenders when you apply for finance, a credit report is a clear indicator of the level of risk that each individual comes with.
A detailed one can be obtained from any of the recognised credit bureaus. In South Africa, consumers have access to at least one free one annually. They can check on any of the websites of the bureaus such as XDS or Experian.