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Sovereign credit ratings
The credit rating of a nation is termed as a sovereign credit
rating. This is done to check on the suitability of investing in
the country and is generally used by capitalists when they are
exploring options abroad.
While applying for a credit card, loan, mortgage, store card, or
rent a property, most lenders will carry out a credit check
before accepting the application. In order to ascertain the
trustworthiness of a person who is likely to pay bills on time,
lenders will usually perform the following checks:
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Credit
scoring
This part of the credit check is carried out during the
application process. The lender will ask the applicant to give
details about his/hers’ employment status, address, current bank
account and credit card, and income, among other things. The
lender will go through the answers with a points system, giving
marks for each answer. If the arrived score is above the limit
set by the card supplier, the applicant will qualify for the
card.
Credit
check report
Your credit report file (or credit check file) began on the day
a person first opened a bank account, and records every credit
card the person applied for, every late payment you've made and
every loan you're paying off. Most of the information on your
credit check report comes from the companies you have credit
with, such as banks, retailers and finance companies. The file
also contains publicly available information such as your
address and any County Court Judgments (CCJs) against you.
Individuals have every right to check their credit files: the
Financial Services Authority can help you with this. If you
believe the information obtained for your credit check is
incorrect, you may file a statement explaining why. Inaccurate
information can be removed but no one can have accurate
information removed from your record.
Various credit rating agencies in
the world
Usually credit ratings for individuals are provided by the
credit bureaus; for corporates and countries, the ratings are
provided by the credit rating agencies. The major credit bureaus
in the United States are Experian, Equifax and Trans Union. In
the United Kingdom credit bureaus are called credit reference
agencies; Equifax, Experian and Call Credit are the three main
agencies in UK. The principal credit bureaus in Canada are
Northern Credit Bureaus, Trans Union and Equifax. The credit
rating agencies that have their networks worldwide include
Moody’s, Standard & Poor’s and Fitch.
When one applies for any credit
card, loan, and mortgage or even takes a property on rent, the
bank or the lender does a check to ensure that the borrower has
a clean history and hence will not default on the loan. The
checks that are usually done to check the authenticity are:
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1. Credit
scoring: this is done after the application has been
submitted by the requestor. The bank requires information about
the client’s employment status, yearly income, mailing address,
credit card number and bank account. Once these details are
furnished by the consumer, the lender evaluates them and then
approves the loan.
2. Credit check report: an
individual’s credit check file starts from the day he opens a
bank account and records all the finance related details ranging
from the various loans to his late payments. All these
information are provided by the companies who have given credit
to the individual, the banks, other financial institutions and
retailers. One can avail all the details of his credit file from
the Financial Services Authority. If any data recorded in the
file is incorrect, corrections can be done after proper
justification.
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