Do You Maintain Your Credit Reputation? |
Credit history is a report of an individual or a company’s borrowing and capacity to repay the debt. It also includes information about late payments. Credit Reputation can be used as a synonym to credit history or to credit score.
Whenever a customer fills an application for credit in any bank or credit card company, their personal information is forwarded to a credit bureau. Then, this credit bureau matches all the information on the credit applicant with information retained by the bureau in its files. Because of this fact it is very important for creditors, lenders and others to provide accurate data to credit bureaus. Then this information is used by credit card companies to determine an individual’s willingness to repay the debt.
In the consumer reports there has been a detailed discussion regarding accuracy of the data. The credit bureaus highlighted that the data in their own study of 52 million credit reports is very accurate. It was proved by Consumer Data Industry Association before Congress that only 2% of the reports that resulted in a consumer dispute were deleted because it was an error. The Federal Trade Commission points that one large credit bureau notes 95% of those who dispute an item seem satisfied with the outcome.[
The credit bureau has 30 days to verify the data in case there is a customer dispute on some information. On an average about 70% o these disputes are resolved within 14 days. After this the customer is handed over the optimum solution.
Income of the person is another major factor in determining whether a lender will provide a consumer credit or loan. The higher the income, the more credit consumer can access. Ability to repay a debt (income) and willingness as indicated in the past payment history are the two distinguished features based on which lenders make credit granting decisions. These factors basically help lenders whether to extend credit and on what terms and conditions.
However it is important to maintain a good credit standing. The best way is to live with one’s means. The lifestyle spending of an individual must not exceed income. And an easy way to it is to maintain a budget. Therefore, there could be a proper supervision of finances.
