The main areas of operation of a
credit report agency is to prepare credit reports of either individual businessmen or corporations across the world, and to review them from time to time as well. In fact, the presence of efficient credit report agency in a country is essential to make its economy all the more affluent and dynamic in nature.
Significance of credit report agencies in a country:
The necessity or significance of the presence of a credit report agency lies in the fact that as soon as credit purchasing starts and replaces cash as the principal form of currency for buying expensive items, the economy of that particular nation gains motivation and becomes all the more prosperous.
Common services extended by credit report agencies across the world:
All the credit report agencies across the globe are entrusted with some common functions, which are mentioned and described below:
- The primary responsibility of a credit report agency is to prepare credit reports for its clients, be they individuals or companies. It is also a part of its responsibility to re-assess these reports from time to time.
- It is the duty of the credit granters to report their activities to the credit report agencies of a country.
- The credit reporting agencies gather detailed information regarding financial institutions and companies, different tax-related offices, owners of landed properties and other credit sources, prior to the preparation of credit reports. They also go in for the credit history of their clients.
- A credit report agency calculates the credit scores on the basis of the credit ratings of the reports prepared, and maintains them as well.
- The methods and techniques employed to gather and manage the credit information of an individual or a company vary widely among different credit agencies.
- In preparing a credit report, the credit report agencies take into account, the following facts about the clients:
- Name of the person or the company concerned
- Residential/commercial address, both current and past
- Date of birth of the individual or the organization
- Credit limits
- Social security number
- Credit-worthiness of the person or the organization concerned
- Name of the former employer and designation, in case of individuals
- Name of the partner/partners, in case of business firms
- Details about the individual's income
- Modes of payment of the bills
- The credit report agencies of a country maintains privacy of their activities very strictly, and do not unfold the or share information regarding the credit details of their clients.
- On the national level, the credit report agencies sell information to insurers, lenders, employers and other commercial organizations. The information are used to analyze the credit-worthiness of individuals applying for home renting, credits, employments and insurances.
Some important credit report agencies include the following:
- Experian
- TransUnion
- Equifax
