Consumers ought to regularly examine their credit report to ensure there are no errors being reported to the major credit reporting agencies. Any time a person applies for credit, whether it be a credit card, loan or other financial product, a notation will be made on this report.
The credit bureaus store information about a consumer’s borrowing and repayment history in this report and it also contains information on public records and anyone who has been authorized to access the report.
This allows the bureau to determine an objective credit rating for a consumer, one using a standardized process.
Consumer Credit Rating
The consumer credit rating provides information on a person’s dependability when it comes to repaying debt obligations. The only person who controls this credit rating is the consumer. Governments and financial institutions have no role in this, and the information provided on the report is used to determine the consumer’s credit worthiness.
Credit tends to be a valuable asset, as good credit helps to lower the interest rate a person will pay on various financial products while increasing the amount they can borrow. In contrast, a bad credit history can lead to a person being denied credit or charged a high interest rate.
Consumer Credit Score
Using the information found in this report, credit bureaus provide each consumer with their personal credit score. This numeric figure represents the credit risk of that consumer at any given time and ranges from 300 to 900 points.
The higher the score, the better the person’s credit history. The lender uses this score to determine how much risk they are taking on if they provide the person with funds.
In addition, the score contains an R rating. This rating comes from the person’s payment history and ranges from R1 to R9. An R1 rating means the person pays their debts in a timely manner. In contrast, an R9 rating suggests the person doesn’t pay their debts, and creditors take this into account.
A number of factors affect a person’s credit score. This include the amount of credit owed, the consumer’s credit usage and their payment history. Furthermore, it looks at the type of credit obtained by the consumer, new credit they have acquired and their credit experience.
Obtaining A Credit Report
Consumers in Canada have the right to see any information contained in their credit report, along with their credit rating. This information may be obtained by mail at no charge, yet a credit score isn’t provided. In addition, this report does take some time to receive, and this may be of concern to individuals who need the information promptly.
Another option is to make use on an online service. When consumers elect to make use of an online service, they receive the report almost immediately and can opt to obtain their credit score also. Be aware that a fee is charged for this service.
Identity theft remains a problem in today’s world, thus consumers need to check their credit report regularly. Any errors may be disputed on this report, and frequent monitoring ensures any unauthorized usage of the person’s credit is detected quickly. Request a report today. Doing so can only be of benefit to every person.