Demystifying Credit Reports
In the course of undertaking credit appraisal, a credit officer is typically expected to comb through a myriad of customer documents including; financial statements, bank statements, asset ownership, charges and mortgages, KYC documents e.t.c. The magnitude of information contained in these documents can be daunting and the information provided may not be objective considering that it is provided by an interested party namely the borrower. To address this challenge, credit reports are designed to introduce efficiency, objectivity and reliability of needed information. A credit report is a detailed breakdown of an individual’s credit history prepared by a credit bureau.
In the absence of effective capacity building, credit reports are prone to misinterpretation and misapplication. This challenge has been evidenced by the rising number of disputes lodged at Tatua Center that are attributed to the wrong interpretation of credit reports by credit officers.
In addition to financial institutions, credit reports are potentially useful to employers, landlords, trade creditors, insurance companies etc. It is therefore paramount that all users of credit reports develop the required proficiency to interpret and apply credit reports suitably.
“A good decision is based on knowledge and not numbers.” Plato (Greek philosopher). This module, therefore, seeks to expose the learner to:
1. The general structure of a credit report
2. Key features of a credit report
3. Distinctive elements of credit reports from different bureaus
4. The main risk triggers to look out for in a credit report
Sample Credit Reports
Glossary of Terms