Have you checked your credit record lately? No? Well, this article should give you more than enough reasons to start monitoring your credit history regularly and become more responsible when it comes to your financial activities.

What is a credit record?

It would contain all of your personal information, specifically your financial behavior.  It also contains various data on your borrowing and repaying, late payments and bankruptcy.

When a person applies for a credit or loan from a bank or credit company, the information that he or she would provide are submitted to a credit bureau, in which the files are organized and kept. This information is utilized by prospective credit card companies and banks to determine if the person applying for the loan has the ability to repay the debts.

Advantages of checking credit record

1. 1.    Faster loan/credit approval
2. After checking your record, and  having proven that you do pay your debts on time and that your salary is adequate enough to suffice for the loan applied for, you will most likely get approved faster.
3. More often than not, how religiously you are able to comply with your payment obligations is more important than the numbers on your paycheck. This gives them an idea of your character and whether you will be able to adhere to the terms of the company.
4. 2.    Lower interest rate
5. If you have a good credit score, not only will you get approved but you may also enjoy lower interest rates.
6. 3.    Verification of records
7. Credit records might not be 100% accurate, that’s why you would also need to have them viewed in order to check and verify the information listed. Important information might also get omitted and inaccurate ones documented, both of which might lower your chances of acquiring a loan. It is a must that you report these errors to the respective agencies.
8. 4.    Helps you become ‘financially’ responsible
9. It gives you a view of how well you are able to pay off your debts, your late payments and overcharges. Just think about all the money lost in charges and how it lowers your credit score. With credit history, you will be able to prioritize and manage your financial dealings.
10. 5.    Increases eligibility for future loans
11. You may not need a loan right now, but you should always try and make yourself ‘eligible’ for one if in case the need arises. You still have chances to increase or redeem your credit ‘worthiness’ now.

 
How to check my credit record?

There are certain services, which are available online, that offer to collect, organize and analyze your credit history from your creditors, as well as from public records. The records are then made available to current and prospective credit companies, banks and employers, thus speeding up your ability to acquire a loan.

What’s good with these services is that you would be able to avail of them for a very low price. This is one service you will not regret subscribing to for it saves you the pain of getting your loan application rejected without a clue why. Knowing your credit record will let you be more responsible with how you handle your finances in order to keep your family’s best interest today and in the years to come.
   

You might have come across a credit bureau report in various banking and credit card sites. It is essential for you to understand this concept for it concerns all those who apply or will apply for credits and loans.

What is credit bureau report?

A credit bureau report or simply credit history is a record of your personal profile, past borrowings and payments, late payments and even cases of bankruptcy. It would also contain all the accounts that you have applied for. Almost everyone has had to take out a loan or two – car or housing loans, credit card purchases, petroleum cards and many others. But little do we know that all of our personal financial information and history of payments are being sent to bank and credit card companies which are then organized and filed safely for future reference. Once we apply for a new credit or loan, your data would then be taken out as well as viewed and analyze to determine your credit worthiness or eligibility for the application. Depending on your credit score, your loan will be rejected or granted and the fees adjusted according to your record.

Credit bureaus also often make use of different computation or algorithms for determining your credit score but here are few of the factors that can affect your score:
•    Payment history – whether or not you are capable of paying on time is a big factor on your credit score. Late payments, repossessions, closures and other negative events can create a big dent on your credit worthiness.
•    Type of debt – different types of debt (revolving, installment and open) can have varying points.
        Revolving debt usually includes credit and petroleum cards. Having a credit card cancelled or closed-off is a definite no-no is you want to qualify for     a loan.
        Installments would require a person to pay a fixed price for a fixed period. Though this is included in the risk assessment (reasons not to grant you a     loan), if your records show that you comply with your obligations to pay the monthly fee, it will be a plus point for your score.
         Open debts are the straight transactions in credit cards.
•    Time in file – how old your credit report is. Usually, the older it dates back, the more stable it is.
•    Account diversity – having multiple accounts (car loans, housing loans, credit cards and etc.) reflect that you can handle several types of account at the same time.

The computation also varies, so it is a must to have your credit bureau report in order to check for any errors and inconsistencies. There are countless instances wherein individuals are rejected in their applications due to errors in the credit history. Viewing your records helps you address the discrepancies and at the same time, assess how well (or poorly) you manage your finances.

How to perform a check credit?
There are many different services online that offer to credit check for a low price. In South Africa, you have Experian as the one of the most reliable companies that offers this service. You can avail of the free trial version in order to understand how the service works. You will eventually need a credit bureau report in order to manage your finances well and qualify for a loan in the future.

Credit companies, such as banks and lending organizations would often rely on a credit bureau check when it comes to making effective financial decisions. It is essential for a creditor to know the details of a consumer’s credit profile before granting him credit.

In this light, an effective credit check would also benefit both the company and the consumer: the information gathered by the credit bureaus will help entities such as banks and credit card companies determine credit line standards for the protection of their business but still be able to provide people with the best financial services.

The following consumer data, included in a credit bureau check report, is used to determine a person’s credit score:

•    Personal details, such as the person's name, age, civil status, previous and current residence, current salary, social security numbers, contact details and employer history. In line with this, any record of fraudulent personal data will negatively impact a consumer’s credit score;
•    Court records which include lawsuits, tax liens and recent applications for bankruptcy;
•    Previous activities with financial institutions that have provided the consumer with some type of credit line, such as banks, credit card companies, or other lending companies;
•    Current record of loans and liabilities, such as mortgage, unpaid rental fees, credit card debt, and existing car loans; and
•    Account information from one's regular payables such as electricity, water and phone bills. The information includes the amount of payment based on the contract and whether or not the consumer pays his financial obligations on time.

On the other hand, there are also some data which are not included in the credit report, these would include: their current checking or savings account, race, gender, religion, medical history, political affiliation and sexual orientation.

Customers often become worried with their data being handled by external entities. However, it is quite comforting to know that these credit bureau take full responsibility over consumer information and have also developed security practices to protect the occurrence of identity theft. As a matter of fact, credit bureaus encourage individuals to access their credit reports and report inconsistencies to them.  

To further illustrate the relevance of a credit bureau check, let’s say that a consumer has applied for a car loan with a bank. The bank would then obtain the consumer’s credit file from the credit bureau to determine the most feasible credit line for their client. Next, a viable payment scheme as well as an effective invoice delivery schedule will be developed to ensure the timely payment of fees. Once both parties are agreeable to the terms and conditions of the contract, payments will be monitored regularly to avoid rolling interest rates.

Creditors know that hard economic times have led people to look for solutions to their financial woes. This is ones of the reasons why loans and payment schemes are offered to consumers with affordable interest rates. However, consumers would also need to take note that providing creditors with fraudulent personal information will eventually be revealed through a credit bureau check, and this will negatively affect their chances of having a good credit score. Consumers should know that creating an honest and equally beneficial relationship with their creditor is vital when it comes to maintaining good credit health.

The credit bureau, specifically one that is based on South Africa, is tasked with the main function of ensuring that the National Credit Act No. 34 of 2005 is enforced and is followed by everyone that is under this stature. For this reason, these bureaus would also have the power to collect information that has to do with the way South African consumers spend their credit and pay their dues. While this may seem like some sort of intrusive function, the different tasks that the bureau fends for actually makes it easier to keep the credit market clean and fair for everyone. Not only do they collect information that are statistical gems for the region, but they also offer various services that would make it easier for consumers to manage their finances.

One of the major functions and responsibilities of a credit bureau is to track the way that the South African consumers make use of their credit as well as to assess how well these individuals involved go about the task of managing their credit. This does not simply mean that they keep tabs on people who qualified for their own credit line. In addition to monitoring the capacity of the South African market when it comes to the issue of acquiring credit, the bureau also takes on the responsibility of monitoring the rate as well as the manner through which consumers deal with their credit requirements. After all, people's spending and repayment habits would say a lot about the economic and social climate of the region. In addition to dealing with numbers, the bureau is able to pinpoint trends and commonalities in the manner through which people borrow money and pay it back.

Since they are tasked to identify and monitor people’s credit habits, the bureau is also responsible for starting and maintaining a repository of all the information that they find about a person’s finances as well as for the community as a whole. This means that you can easily call on them if ever you need to get your hands on a copy of your financial rating any time in the future. This office also offers various services that would allow you to get a better idea of where you are financially and some useful advice that should help you improve your standing if necessary. If ever you need any kind of financial document in the future, all you have to do is to contact the bureau or any of its satellite offices and request for the document that you need.

Finally, the credit bureau also has the responsibility of alerting credit companies, banks, and financial institutions about whether you will be a good client or not. If you are going to apply for a loan, for example, the bureau will give your lender an idea of how much you can afford to borrow and how much interest you have the capacity actually pay off. This way, you will not be allowed to take out loans that you will find too hard to pay off and you will not have to stick with terms that will be impossible for you to work with.