Member banks, credit card companies and other financial institutions send financial data of registered individuals as well as commercial institutions to the Credit Bureau on a periodical basis. This Credit Bureau uses the financial information to create a credit report. This credit report contains a person’s personal information, payment history, number of accounts, default (if any), credit transactions, outstanding loan amount and other such financial information.
Based on this report and analysis of financial data, credit score is given to an individual that helps lenders to check on an individual’s creditworthiness. When you apply for a loan or credit card, lending banks or credit card companies contact the credit bureau and go through your credit history to judge your repaying ability. If your credit history and credit score, both are satisfying to lenders, then only they are going to lend you money. On the request of banks, consumers, credit providers, credit card companies and collections agencies, Credit Information Companies provide Credit Reports.
