To most of us, credit reports are a necessary evil. Even if we do not go out and borrow money from a bank or a loan company, we have to be able to prove that we have the capacity to repay it.
However, with the ever-expanding technology and the so-called "internet of things," this is no longer a necessary evil. We can now use our devices as credit reports for us. In fact, some people have been doing it since as early as 2007!
In 2021, there will be more than 25 billion connected devices in operation all over the world. More than half of these devices will be IoT-enabled gadgets such as smart TVs and washing machines which can report on their own status or malfunctioning condition via their own app or cloud service.
What is a Credit Report and How Does it Work?
A credit report is a record of someone's payment history with various financial institutions. It contains information on the borrower's creditworthiness, their past performance on loans, and their timely payment history.
Credit reports are generated by financial institutions such as banks, mortgage companies, retailers, etc., who collect data on customers' loan repayment. There are three main types of credit reports: public or consumer reports (one free report per year), commercial reports (generally not free), and investigative consumer reports (generally more expensive).
How the Credit Score System is Impacting Your Financial Success?
The credit score is a tool that's been around for some time now. It's used to establish your credit worthiness and also to help lenders decide on whether it is worth giving you an account or not. As of today, the credit score is impacting our financial success in a big way.
Let’s take a closer look at how this system works and what impact it has on our personal finances.
Credit scores are tools that are based on data gathered from one’s past repayment history, current debt obligations, and other factors relevant to the lender. Lenders use these scores to assess whether or not they should offer you an account based on your risk profile as compared to other borrowers who have already received accounts from them before.
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