Credit Reports/Sources of Credit Reports/Introduction
Introduction
The goal of this material is to introduce credit reports, their purpose, uses, and components. This information will also identify reliable sources for credit report information for international transactions. The learner will be able to:
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This lesson describes the purpose and components of credit reports. There are different perspectives when it comes to credit reports: 1. from an individual and 2. from the seller’s perspective (i.e., business or commercial perspective). Another perspective may be from a financial institution such as a bank. We are going to focus on the seller’s perspective. We are going to assume that a person or persons within a business is responsible for assessing whether a buyer (e.g., an individual, another business, etc) has a credit history that demonstrates whether they can and will make payments accordingly. More specifically, we are going to assume that the credit report is obtained from a source outside the seller’s business. This type of information is contained in external credit reports. The persons that request credit reports and analyze them have many titles. For example, analyst, credit manager, international credit manager, etc. To keep things simple, we are going to assume that they are the international credit manager (ICM).
In order to convey the purpose of a credit report, the following topics will be discussed:
- What is a credit report and the components of a credit report?
- Purpose of a Credit Report
- Direct Sources of Credit Information
- Indirect Sources of Credit Information
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