Usefulness of Credit Bureaus for Borrowers
- Negotiate Favourable Credit Terms: Approval or denial of credit and charging of either high or low interest rates greatly depend on the credit history of the borrower -- a high risk naturally attracts higher rates along with other harsh conditions and vice-versa. An individual/company with a good credit history can not only be granted credit but can also negotiate the terms favourably.
- Improve Access to Credit: With Nigeria’s inadequate property rights and enforcement laws, individuals may have good collaterals but not be known to repay loans at scheduled times. Today, credit reports have given a wider set of the population opportunities to access credits.
- Promote Employment Opportunities: Many employers do background checks on their employees and potential employees in order avoid individuals with financial troubles in their organisations. Obviously, every organisation is interested in recruiting those who can focus on their jobs and work at the peak of their potentials. On the other hand, individuals with credible financial lives are recruited easily with a trust to upholding the integrity of such firms and/or having less possibility of committing frauds.
- Avoid Identity Thefts: Credit experts advise that individuals check their credit status at least twice in a year. This enables them detect wrong information reported about them within the financial industry and also notify them when their identities are being used to perpetrate frauds.
- Prevent Over-Indebtedness: Credit bureaus have made it easy for borrowers to monitor and manage their debts, irrespective of the number of loan facilities they may have. A debtor can now plan his repayments effectively without being over extended – as he may not be granted a loan if found to have a bad credit history as explained earlier.
- Other Uses that Affect the Individual: Anyone with a reasonably permissible purpose can look at your credit report. Such parties may include:
- Insurance Companies
- Companies you allow to monitor your account for security purposes, such as identity theft.
- Groups considering your application for a government license or benefit
- Law Enforcement Agencies
- Government Agencies authorized by law
- Persons who use your credit report to provide products or services you requested.
- Persons who have your written authorization to obtain your credit report.
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