When you extend credit to customers, you’re essentially providing them with a loan equal to the amount of their purchases.
And this is where a credit worthiness report would come into play.
If an individual submits an application for credit, an insurance policy or rental property, creditors, insurers, landlords and select others are legally allowed to access their credit report. Employers may also request a copy of an individual’s credit report as long as the individual agrees and grants permission in writing.
These entities typically must pay the credit bureaus for the report, which is how credit bureaus earn money. Free credit reports are also supplied by the credit bureau to its customer once per year.
Lenders then look at a borrower’s credit reports, credit score, income statements and other documents relevant to the borrower’s financial situation. They also consider information about the loan itself.
This refers to a credit worthiness report, which shows a borrower’s reputation or track record for repaying debts. This information appears on the borrower’s credit reports generated by the major credit bureaus like TransUnion.
Credit reports contain detailed information about how much an applicant has borrowed in the past and whether they’ve repaid their loans on time.
The credit history summary then indicates the number and type of accounts that are past due or in good standing. Detailed account information related to high balances, credit limits and the date accounts were opened.
These reports also contain information on credit inquiries and details of accounts turned over to credit agencies. Like information about collection accounts, judgments, liens and wage garnishments.
Generally, credit reports retain negative information for seven years, while bankruptcy filings typically stay on credit reports for about 10 years. Other information may include personal information such as current and previous addresses and employment history.