What is a credit report and how does it work? read here

You’ve probably heard of a credit report being taken when you apply for a loan. But what is it and what does it contain? And who does the credit report?

All this you get answers to here.


What is a credit report

What is a credit report

A credit report or credit check as it is also called, must by law always be taken when applying for a loan or credit card. This is done so that the lender or bank can assess their risk in offering you a loan, credit or credit card. So based on this credit report, they can decide whether to grant you a loan or a credit.

In this way you as a borrower become more secure, as the lender has information about your finances and situation.


What contains a credit report

What contains a credit report

There are two different types of credit information, personal data, and micro information. A piece of personal information is the credit information that contains the most information.

It includes:

  • Your income information (current and a few years back)
  • Marriage
  • property holdings
  • Possible payment remarks
  • Previous credit requests / credit information
  • Possible debt balance at enforcement authority
  • Possible active credits

A piece of micro information contains only the name and address, any payment notes and debt balance at enforcement authority.


Who carries out a credit report?

credit report

Today, there are several credit reporting companies that carry out credit reporting. Thus, it is not the lender itself or the bank that performs it, but they ask a credit reporting company to make a credit report when they have received a loan application.

Today, most of this process is automated.

Therefore, it is possible to carry out the credit report quickly. The lender can therefore give a reply back to the borrower relatively quickly.


UC (Information Center)

The oldest credit reporting company is UC (The Information Center). They previously had a monopoly on credit reporting in Sweden and were therefore the only ones allowed to carry out credit reporting. However, this rule was recently abolished, which has led to the creation of other credit reporting companies. UC cannot see if a credit report is taken by the other companies and vice versa. Therefore, many lenders have chosen to use other credit reporting companies for credit testing.


This will not affect your creditworthiness in the future.

If a credit report shows that you have many previous credit requests, the lender may consider you a major risk. Many previous credit reports may indicate that you have tried to take many loans in a short period of time. This means that you get a lower credit rating that can lead to a higher interest rate or, in the worst case, your loan being denied.


When a credit report is taken, you always receive a letter about this

If you receive a letter about this without having entered into a loan agreement or other agreement, you should contact the credit reporting company directly to find out who has taken a credit report on you. Credit information is not only taken in the loan context. It can also be taken when you sign a mobile phone subscription or before you sign a lease.

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