credit report

(noun)

A document of the history and current status of a borrower's credit standing, and may include identifying information, credit information, public-records information, recent inquiries and credit score.

Related Terms

Examples of credit report in the following topics:

  • Obtaining Credit

    • The credit card company uses the credit report, provided by the credit bureau, to determine if the lender is likely to pay back the loan.
    • Types of credit include: bank credit, consumer credit, public credit, and investment credit.
    • Credit history or credit report is, in many countries, a negative record of an individual's or company's past borrowing and repaying, including information about late payments and bankruptcy.
    • The term "credit reputation" can either be used synonymous to credit history or to credit score.
    • However, lenders make credit granting decisions based on both ability to repay a debt (income) and willingness (the credit report) as indicated by a history of regular, unmissed payments.

  • Information collection methods

    • Fee based companies, such as Hoovers, LexisNexis, and the credit reporting companies are in the business of collecting and compiling information on businesses and individuals.
    • For example, credit reports are available for competing firms and credit reports can yield a good deal of information about a firm's financial condition.
    • For example, building permits are typically reported in newspapers and can often be accessed online, while building plans are usually available only through a visit to the public planning office.
    • Similarly, the annual report that a public company files with the government is another example of a document that may yield a good deal of information about a competitor.

  • Collection from Delinquent Payables

    • If an individual does not repay borrowed money to a credit card company and 6 months of nonpayment have passed, the credit card company may declare a "charge-off. " This means that the debt is "written off as uncollectable," so that the credit card company will get a tax exemption on that debt.
    • The "charge-off" declaration severely negatively impacts the debtor's credit report and the creditor still has the legal right to collect the full amount over a period of time, depending on permitted local laws.
    • A charge-off is the declaration by a creditor (usually a credit card account) that an amount of debt is unlikely to be collected.
    • A charge-off is one of the most adverse factors that can be listed on an individual's credit report, greatly impacting an individual's ability to get credit in the future.
    • Explain the ramifications of failing to repay credit card and loan debts

  • Credit Ratings

    • Credit ratings are determined by credit ratings agencies.
    • First, the Basel II agreement requires banks to report their one-year probability if they applied internal ratings-based approach for capital requirements.
    • Therefore, some rating agencies simply report short-term ratings.
    • A credit score is primarily based on credit report information, typically from one of the three major credit bureaus: Experian, TransUnion, and Equifax.
    • The credit bureaus all have their own credit scores: Equifax's ScorePower, Experian's PLUS score, and TransUnion's credit score, and each also sells the VantageScore credit score.

  • Trends in Franchises: Growth

    • In addition, tighter credit standards have limited the formation of new franchise small businesses and the expansion of existing businesses. "
    • If the IFA is silently longing for the loose credit standards that reigned supreme in the middle of the last decade then that perhaps is the wrong path down which to proceed.
    • But as stated above, the one constant with the economic outlooks produced by the IFA over the last four years is that each year the reports change many of the figures stated in the report of the previous year.
    • The reports do have a convenient escape mechanism in that all of the reports state that the numbers are "estimates. " In other words, neither the IFA nor the high powered accounting and consulting firms commissioned to compile the reports know conclusively how many franchise establishments exist today.
    • If you read the reports carefully you will see that the PWC reports state that 2007 was the first time that there was enough data to even put forth a sound estimate.

  • The Role of Financial Managers

    • They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.
    • Controllers also are in charge of preparing special reports required by governmental agencies that regulate businesses.
    • Credit managers oversee the firm's credit business.
    • They set credit-rating criteria, determine credit ceilings, and monitor the collections of past-due accounts.
    • In preparing and analyzing reports such as balance sheets and income statements, financial managers must pay attention to detail.

  • Cash flow forecasts

    • This section discusses some of the more common reports prepared from an accounting system that have, over the years, proven to be valuable tools for managing a business.
    • Prepare for adequate future financing and determine the type of financing you need (short term credit line, permanent working capital, or long-term debt).
    • Even if you have a retail business and a large percentage of your sales are cash, it is likely that you offer credit (charge accounts, charge cards, term payments, layaway, trade credit) to your customers.
    • Thus, you need to have a means of estimating when those credit sales will turn into cash-in-hand.

  • The National Credit Union Administration (NCUA)

    • The National Credit Union Administration (NCUA) is the United States independent federal agency that supervises and charters federal credit unions.
    • The chartering of credit unions in all states is due to the signing of the Federal Credit Union Act by President Franklin D.
    • The federal law sought to make credit available and promote thrift through a national system of nonprofit, cooperative credit unions.
    • At first, the newly created Bureau of Federal Credit Unions was housed at the Farm Credit Administration.
    • As the insurer and regulator of federally chartered credit unions, the NCUA oversees credit union safety and soundness, much like the FDIC.

  • Credit Unions

    • Credit unions are substitutes and competitors of banks, owned by members as a financial cooperative.
    • Credit unions usually offer better rates on deposits and lower costs for loans
    • Credit unions offer access to borrowing options not always available at traditional banks
    • Credit unions increase competition (big banks tend to be oligopolies, while credit unions are intrinsically smaller in scale, thus high in quantity)
    • Credit unions are smaller, and therefore more likely to go out of business

  • Day-to-Day Needs

    • The International Financial Reporting Standards (IFRS) defines operating cash flow as cash generated from operations less taxation and interest paid, investment income received and less dividends paid.
    • Cash inflows come from cash sales of inventory, collection of credit sales, sales of other assets, and funds obtained through credit financing.