For individuals and businesses alike, knowing their level of debt is important. This is because future prospects and future decision making will depend on the current position you are in. Management of your borrowings and how well you repay them all impact your lifestyle and business alike. So having an understanding of where you stand in terms of borrowing and their repayment is considered very important.
Universally, a document called a Hong Kong credit report is used to understand the borrowing history of a debtor. This report will hold information relating to accumulation of debt, how they are being paid, location of employment and residence, foreclosure details if any, vehicle lease details etc to name a few. Usually they are gathered from different sources such as governments, banks, collection agencies and credit card companies and even employers. Though collection and storage of these data may differ globally, in many western countries, an institute called the credit bureau is used.
Investment bodies, banks and other institutes or professionals recommend that individuals and organisations alike should constantly or periodically check their levels of debt management, and they should make use of this report. Checking it is also important to make sure that what is recorded is correct, as human error or even identity theft can occur in this day and age.
This document or file that details your financial history is important as many businesses will check it to understand your business or your financial history. They will check your creditworthiness by looking at your business credit rating agencies or credit score. Though these words refer to the same thing, and are used interchangeably, they have a slight difference. That rating scheme is mostly used for businesses while the score is used for the assessment of individuals. Financial institutions such as banks would use the data gathered from this report before providing a bank loan or even a credit card. Employers will also likely do a background check on their prospective candidates and even current employees, to determine their characteristics, financial responsibility and even integrity. Sometimes landlords would check your previous financial dealings before signing an agreement to rent a location or even to sell a property. Monthly premiums for insurance schemes are also calculated sometimes based on the rating or score gathered from this report. Therefore it is a very important document and can contain many important details about your life and business.
When opening or going through a report, it can be somewhat complex and overwhelming, but basically some of the most common data found in the report would include, details of your residence or mailing addresses, credit card account details, past and present employer details, loan or lease account details, details of accounts that have been newly opened or closed and payment details on various borrowings etc to name a few.
However, though these may be complex to understand for a beginner, knowing where you stand in terms of your debt and the profile that is being built in the public domain has to be important to you and monitored periodically to ensure its accuracy.