Are you sure you want to delete this answer?
BREAKING DOWN 'Credit Reference'
Individuals and companies can carry out credit checks on businesses in order to assess their credit worthiness . Credit references are used to help lenders quantify the risk of lending to a given applicant or to determine overall creditworthiness.
For example, if an applicant's credit history indicates proper, timely payments on all outstanding obligations , a lender may judge it more likely that the applicant will make timely payments on the requested loan. Your credit references show as credit tradelines on your credit reports. Whats known as credit tradelines is also known as credit references. Whether the credit reference is a good one depends on if the payments have been made on time or not.
The credit limit and payment history in the credit references give other potential creditors an idea on whether an individual will make payments on time or default. Credit references also determine if an individual's credit score. What is a good credit score? How much does it cost to get a copy of your credit score?
I know you can get a credit reference report for free, but I want to know what my actual score is. I was also told the more times your credit references are checked, the worse that looks for you and your score could actually go down. If I was the one loaning the money, I would want to make sure the person had a good history of paying money back. I have had to give credit references when renting an apartment. This is really not much different than getting a loan for a car.
You are under contract to pay so much money every month for a place to stay, and the landlords want to know they aren't going to have problems getting paid. Your credit references stay on your record for several years, so I work really hard to make sure I have a good credit history. This makes it a lot easier to get financing and to get a better interest rate. Mykol Post 2 When my son was trying to get a loan for his car he was not able to get one with a decent interest rate without a co-signer.
When they saw his credit references on his credit report they were reluctant to go ahead with the loan. He went through a few months without having a job and got behind on some of his bills. All of this showed up on his credit report, and the lending agency was reluctant to finance the loan without having some kind of back up. John57 Post 1 There are three major companies where you can get a free copy of your credit report from.
You can have one free report a year from each of these companies. I like to stay on top of my credit report to make sure there isn't any unusual activity going on. Since I hear so much about identity theft, this is one way I can make sure my credit cards aren't in the wrong hands.
I order my reports on a rotating basis every four months. This way I get three free reports a year, each one from a different company. It is kind of interesting to see how each of the three companies report everything. These reports do not give your credit score, but you are least able to see a tracking of all of your activity.
Post your comments Post Anonymously Please enter the code: One of our editors will review your suggestion and make changes if warranted. Credit reporting agencies use various methodologies for generating credit scores. Lenders will usually require a specific credit score level based on their underwriting standards for loan application approval. Situations beyond standard credit account approvals may also require a credit report.
These requests may be in relation to employment, apartment rental agreements or insurance quotes. Most often a lender will require a credit reference letter when requesting individual credit references.
In some cases, lenders may request only reference contacts with the references being called by the lender during the underwriting process. Credit reference letters are often requested in business loans. Generally, a credit reference letter must include information on the reference such as the name, relationship and any details pertaining to past credit history. One example of the need for credit references might include an overseas business wishing to establish its credentials in the United States.
This business may obtain a number of credit references from other businesses, banks, vendors and customers that it has dealt with in its home country. Individuals may be asked to provide credit references in a variety of different situations. Having a strong awareness of potential individuals or businesses that can be contacted as a credit reference can be helpful in expediting a credit reference process.
You might also Like
A “credit reference” is a document that attests to the creditworthiness of a prospective borrower or rental applicant. The most common type of credit reference is a credit report, as it chronicles an individual’s or business’s credit history. A credit reference is information, the name of an individual, or the name of an organization that can provide details about an individual's past track record with credit. Credit rating agencies provide credit references for companies while credit bureaus provide credit references for individuals. What is a 'Credit Reference' Credit references can be a credit report or documented letter from a previous lender, personal acquaintance or business acquaintance. Lenders use both credit reports.