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Credit Agency
A credit agency is a company that provides credit information on borrowers. They help lenders to judge a person's credit worthiness and their likeliness to pay back a loan. They do not pass judgment on the borrower's credit worthiness; they simply provide the necessary information for the creditors. This type of information can affect the interest rates on the loans available to the borrower. The credit agency collects financial information about the borrower from financial institutions that they have had dealings with.
The information that is found is compared with the information of many other individuals with similar situations. This means that the results are based on the risk factors of other people's previous actions. This type of calculation can seem unfair to many people who may not have a particular low credit history themselves. The data involved needs to be accurate in order for the system to work at all and so borrowers are advised to apply for a copy of their credit reports and review them regularly to ensure that the information is correct.
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