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Credit Report News, Tips & Advice « Credit Reports > Credit Report Tips > Why Companies Sometimes request for your Credit Report

Why Companies Sometimes request for your Credit Report

By Karen Anderson
Published: Friday, February 26th, 2010

There are three major and recognized credit bureaus, Equifax, TransUnion and Experian. These three credit reporting and scoring companies are the ones responsible for the credit worthiness ratings that credit account holders receive. As mandated by the law in the Fair Credit Reporting Act or FCRA, credit account holders have the right to annual and free credit reports and scores from these three credit bureaus.

However, the mandate of the law is not enough to make people have better credit scores and credit reports. Supplementary information and factual guidelines such as credit report tips are necessary in gaining good credit reports and high credit scores.

Credit scores are made and devised to give companies, particularly the lending companies with at least an overview on the general financial status of the borrowing parties. Credit report tips are additional insights on how to keep these scores and reports. Getting and maintaining high credit scores and a good credit report is the dream for many credit consumers, finding the ways to do so are the obstacles needed for this endeavor.

Crediting companies require these assessments of one’s credit worthiness for the general reason of having an overview of the credit worthiness of those who apply for loan proposals. However, credit report and credit scores are sometimes specifically designed to measure specific aspects of one’s credit worthiness. These reasons affect the credit account holders’ credit worthiness at specific points. These specified points and aspects are the parts of the whole credit worthiness, which can make them appear as liabilities or assets.

Credit report tips are available to assist the credit account holders in these specific fields. These different fields can be:

  • Insurance risks
  • Response rates
  • Revenue potential
  • Collect ability
  • Bankruptcy potential
  • Attrition potential
  • Fraud potential

Credit reports and scores are used by insurance companies to solve for the possible insurance claims of the insurance policy holders. One of the best credit report tips which is to find ways of keeping the credit scores high and credit reports good, is needed to make the insurance companies see the insurance holders as assets rather than risks. Response rates are also measured through credit reports and scores. This response rates is the chance of an individual to respond to an offer from the financing and crediting companies.

Revenue potential is where the credit report tips on appearing as an asset to the company works. Individuals who appear as possible revenue opportunities to the companies are measured through credit scores and credit reports. Collect ability is the measure of someone’s ability to pay his or her debts, which is seen in his or her credit report and score. Bankruptcy potential measures the probability of the individual to file for bankruptcy which is bad for business borrowings.

Attrition potential measures the possibility of someone shifting from one credit card Company to other. And lastly, fraud potential protects businesses from possible fraud in identity and card use. The reasonable credit card tips urge individuals to find the true value of credit scores and credit reports in their every day lives.

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