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Credit reports contain information about a consumers financial
history and performance with credit grantors. A file is created when a person first borrows money or applies for credit. Companies that lend money or issue credit cards such as banks, finance companies, credit unions and retailers send
information about their customers to credit reporting agencies.
Not all credit reports are the same. A basic credit file contains four types of information.
Personal information:
Name, verification of social insurance number, date of birth,
address and employment.
Credit information:
Credit accounts include loans with banks, retailers, credit card issuers and other lenders. Which may include types of accounts, monthly payment amounts, manner of payments balances owing, amounts past due and NSF cheques.
Credit account details are
supplied by creditors with which your tenant has an account.
Every piece of credit history information in
a credit file is assigned a
credit rating
by the credit grantor. These evaluations are based on industry standards, the most common of which use a range from R 0 to R 9. R ratings is the standard credit rating system known as the "North American Standard Account Ratings"
Public record information:
Any information that's contained in court records, such as; collections, judgments bankruptcies, secured loans and other responsibilities.
Inquiries:
Credit Inquiries show credit grantors when the consumer had applied for new credit which could result in additional debt. Potential lenders view multiple recent inquiries on a credit report as a sign that the consumer may be overextending themselves.
Some credit files also contain Credit Scores:
A majority of lenders use
credit
scores
as one method to estimate an applicant's credit risk. The rental industry frequently use scores as an important factor in the decision whether or not to offer credit. In general, higher scores are considered less of a credit risk.
A credit score is a risk predictor that can help to reduce the time and cost associated with tenant approvals
and can predict the likelihood of delinquency. People with high FICO scores are
considered more likely to repay loans and credit cards more consistently than people with low FICO scores.
Fraud Alerts:
Safe Scan is an automated fraud screening tool that monitors irregularities and misuses of names,
addresses, telephone numbers, social insurance numbers and more reducing the
risk fraudulent activity.
Read more about
why Landlords need to check credit.
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