Credit report is a person’s or company’s history about his previous borrowings. Its also termed as credit score. Whenever you apply for a loan in some company, they will enquire about your credit history. You have to fill an application form in order get loans that requires some basic information about you. Given data is then matched against the records of credit bureau. Credit bureau is a federal agency that collects information about the credit history of individuals and different companies. They are constantly in contact with all the leading creditors and are constantly collecting information pertaining to the credit records.

So it’s very important to provide valid information to the lenders. Mostly there is a time of 30 days to verify this but usually it’s done within 14 days in US. After the verification loan is sanctioned only if it shows your good reputation as a debtor. There are many companies in the private sector that publish free credit reports. Credit report has records against every credit entry you’ve ever made. It contains data about the monthly payments and how timely they were paid. It also contains data about your behavior with the previous creditors and shows how responsible are you towards your obligations.

Different credit ratings are assigned according to some particular criteria that vary from country to country but the base is same and that is, your credit report. Many factors affect these rankings e.g.; payment history, control of debt and your responsibility and stability as a debtor etc. Control of debt is a measured by checking whether you are taking loans according to your needs or you are in a habit of incurring loans. If you are ranked well then there are high chances to get loans easily and there is a significant decrease in the markup also. So credit score have its impact, not only on the approval of the loan but also affects the terms and conditions settled with the company. If you have a good credit history then the risk of the lender will be lower and hence it will reduce the interest rate that you have to pay for loan. On the other hand if credit score shows you as defaulter then either the company will decline your application or approve with a high markup.

It’s important to note that credit ratings are only available for the companies working within the same territory or sometimes only within the same network. If you have a good credit history in your homeland and then migrate to some other country it will not help you to take loans there. For that you have to tart from the scratch once again and built up some reputation. However it might be beneficial for the defaulters to move to some other country to hide their bad record.