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Sources of Credit Information

This document discusses the major sources of credit information for lenders. It identifies five primary resources: 1) personal interviews, 2) personal references, 3) credit reporting agencies, 4) credit bureaus, and 5) banks. Credit information is increasingly important for a variety of industries in determining creditworthiness of individuals and businesses. To make sound credit judgments, managers need information on the honesty and repayment intentions of owners, the business's historical performance, and its current financial position.

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Biens III
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425 views11 pages

Sources of Credit Information

This document discusses the major sources of credit information for lenders. It identifies five primary resources: 1) personal interviews, 2) personal references, 3) credit reporting agencies, 4) credit bureaus, and 5) banks. Credit information is increasingly important for a variety of industries in determining creditworthiness of individuals and businesses. To make sound credit judgments, managers need information on the honesty and repayment intentions of owners, the business's historical performance, and its current financial position.

Uploaded by

Biens III
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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SOURCES

OF CREDIT INFORMATION

VINCE CAIBIGAN
Interest in credit information
concerning individuals as
consumers of goods and services
or as borrowers of money has
been increasing. Manufacturers,
retailers, service establishments,
insurance companies, and even
professionals including debtors
use such information. Similarly
concerned with such information
are banks, real estate firms and
institutions like hospital and
hotels. The need for credit
information and the number and
variety of uses to which it is being
put are constantly growing.
MAJOR RESOURCES OF
CREDIT INFORMATION
1. PERSONAL INTERVIEWS
a face-to-face meeting or two-way
communication between the borrower and the
lender.

2. PERSONAL REFERENCES
known as character preference, is a brief
assessment of the borrower as an individual
provided by someone who knows the borrower.
MAJOR RESOURCES OF
CREDIT INFORMATION
3. CREDIT REPORTING AGENCIES
a business that maintains historical credit
information on individuals and businesses. The
most well-known credit reporting agencies in the
U.S. are Experian, TransUnion, and Equifax.

4. CREDIT BUREAUS
an organization that collects and researches
individual credit information and sells it to
creditors for a fee, so they can make decisions
about extending credit or granting loans. CIBI
Information is the first credit bureau in the PH.
MAJOR RESOURCES OF
CREDIT INFORMATION
5. BANKS
a financial institution licensed to receive
deposits and make loans, and ultimately to take
credit.
Credit information can
be further obtained from
such sources as
salesmen, lawyers and
the customers' own
financial statements.
To arrive at a sound
judgment of customers,
a credit manager must
know:
a. Whether the owners or managers
concerned are honest and intend to
repay their debt;
a. Whether the owners or managers
concerned are honest and intend to
repay their debt;

b. Whether the history of the


concern shows satisfactory
progress;
a. Whether the owners or managers
concerned are honest and intend to
repay their debt;

b. Whether the history of the


concern shows satisfactory
progress;

c. Whether current operations and


financial position of the concern are
sound.
The credit manager
should be familiar with
all the available agency
and interchange sources
of credit information and
know what type he can
expect to obtain from
each source.
THANK YOU

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