What Is A Credit Report?

In any financially mature country like South Africa, the phrase credit report is fairly significant. This is especially true after the lending inspired financial meltdown that the world recently endured. In fact, since the global economic downturn, financial institutions and national governments have become very careful of the concept of credit.

This means that no credit or loan is forwarded unless the person applying for it has been thoroughly checked with regard to his finances. Needless to say, the reason for this is simply that even lenders need to ensure that their borrowers have the ability and the acumen to pay back the money that they are asking to borrow.

This is where the well used phrase credit report comes in. A credit report is a document that would contain all the relevant details of your finances in the past and the present and would be used to project your financial future. This would include important nuggets of information such as how much you have borrowed in the past, the size of your outstanding debt, the variety of your credit right now and how consistent you were with your monthly instalments.

This means that if you have not borrowed much in the past, have paid off the borrowed money consistently, do not have any outstanding debts currently and have a stable income then your credit report would be positive.

As mentioned above, a credit report is the most important for financial institutions such as banks, government lenders and even insurance providers who all need to make sure that you can pay back the money you borrow. However, these are not the only people interested in credit reports of individuals.

While it is not common, it is also not unheard of for employers to check the credit report of their potential employees in a bid to understand how responsible the employee is and whether he would be a good fit for the company.

As is evident from what credit reports are, it is important for every individual to check his on a regular basis. If you check your credit report regularly for consistency, you would be in a better place to spot any mistakes that are making your credit score bad.

Furthermore, if you check your credit report regularly and find no mistakes in it but still realise that it is not perfect then you can categorically go about fixing your credit score by carefully undertaken procedures.