The Individual Credit Report
An individual credit report contains information that will assist subscribers in making credit decisions. Subscribers include banks and lending institutions, along with a wide range of other services.
An individual credit report includes personal details such as:
- current residential address
- driver’s licence
- employment details
- bankruptcy information
- overdue accounts
- loan applications
Anyone can have a copy of their own individual credit report. The bank has the same copy. Naturally, before a lending institution lets you borrow, they want to know your credit standing. Having an individual credit report lets you show the institution that you know your financial resources well.
I have always included a copy of my individual credit report in my financial report. I always received an overwhelmingly positive reaction to its inclusion. Usually, the loan assessors told me that they have never seen a copy of this report provided by the applicant. Many were amazed that I was even aware that this report exists.
I want to be viewed as a professional and knowledgeable investor. By including all pertinent information, I make my financial report more clearly true and correct.
Check for accuracy
A more practical and important reason for having a copy of your individual credit report is to check its accuracy.
On one occasion, I was preparing my financial report for an investment property I had purchased. I ordered my credit report and discovered an entry for a deposit bond of $2.85 million. The properties I bought totalled $2.85 million, but the deposit bond I had applied for was for only $180,000.
I called the company that issued the bond and received a letter explaining the error. I attached the letter to my credit report to prove to the lending institute that my credit report was incorrect. The lending institute accepted this, and I secured my investment loan and settled the property I had bought. Later, I forwarded a copy of the letter from the deposit bond company to the credit report issuer and had the error corrected.
Any comments or entries shown on your individual credit report cannot be removed, only changed, and only with the acknowledgment of the credit provider who is responsible for the error.
Finding an error in my credit report taught me a valuable lesson about being prepared. If I had not found this error, I would not have raised the matter with the lending institution, and my application would probably have been rejected. Banks or lending institutions are not required to provide a reason for declining a loan application. If I had not discovered the credit report error, it may have led to multiple rejections and serious financial consequences.
Loan requirement
Your application for an investment home loan may be approved subject to a satisfactory credit report. This means that your application can be assessed based on the information provided in your financial report, but once the lending institute is prepared to approve your loan, they may request your credit report for a final check.
Usually when an application for a loan is made, the lending institution first checks your credit report. If this report is not satisfactory, say for instance you are bankrupt or have numerous unpaid accounts, your loan will be immediately rejected. This is a time-saving measure for the lending institution. There is no need to even consider a loan application if the applicant’s credit report is unsatisfactory.
Avoid marks on your credit report
Every time a credit provider inquires, your credit report is marked. It’s also marked if you make multiple loan applications, or if you have a loan rejected. Lending institutions do not look favourably on credit reports with lots of marks.
In order to maintain control of my credit report, I do not permit any inquiry until my loan application has been approved in principle. A credit provider is not allowed to view your individual credit report without your written consent. Although I include a copy of my individual credit report in my financial report, the lending institution will still insist on obtaining their own copy, just in case it’s been marked since I obtained my copy. They also want to check that I have not unlawfully altered my copy.
Summary
- Get an individual credit report
- Make changes to your credit report if any details are incorrect
- Lending institutions use individual credit reports to check your credit standing
- Do not permit any credit check until loan application has been approved in principle
