Credit Insight

What is credit?

Credit is money lent to you by a creditor on the condition that you will pay it back at a later date. The terms and conditions for receiving the credit vary by credit type and lender.
The amount of credit a lender is willing to issue you is determined by a number of factors including current financial obligations such as rent, utilities, insurance payments and other lines of credit. Creditors also take into account your credit history and how you've managed credit in the past by way of a credit report.
What types of credit are there?
There are two different types of credit that are available: investment credit and consumer credit.
  • Investment credit – This type of credit is issued to consumers or businesses in order to obtain a mortgage on a home or property. Investment credit is issued at a fixed or variable rate and the repayment is scheduled in monthly installments over a set amount of time.
  • Consumer credit – This type of credit is issued to consumers for purposes other than mortgages. Consumer credit generally has a fixed repayment schedule and offers either fixed or variable interest rates.

What types of credit are there?

There are two different types of credit that are available: investment credit and consumer credit.
  • Investment credit – This type of credit is issued to consumers or businesses in order to obtain a mortgage on a home or property. Investment credit is issued at a fixed or variable rate and the repayment is scheduled in monthly installments over a set amount of time.
  • Consumer credit – This type of credit is issued to consumers for purposes other than mortgages. Consumer credit generally has a fixed repayment schedule and offers either fixed or variable interest rates.

What is a credit report?

A credit report is a record of your credit history including information on how much credit you are currently being issued, as well as your current and past credit payments.
The purpose of a credit report is to help lenders determine if they should grant you credit.

What is included in a credit report?

A credit report consists of:
  • Personal information – Full name, social security number, aliases, addresses, employers and date of birth.
  • Credit history – All lines of credit issued in the past 7 years.
  • Open credit – All open lines of credit.
  • Closed credit – All loan and credit accounts closed by you or the creditor.
  • Derogatory credit – A record of late payments, charges, repossessions and foreclosures.
  • Public information – Legal judgments, tax liens, child support and bankruptcy.
  • Inquiries – A list of entities who have obtained a copy of your credit report within the past 2 years.
  • Credit score – An indication of your credit worthiness.

What is not included in a credit report?

There is some information that will never be included in your credit report. Some examples include:
  • Personal income, and bank account information
  • Race and national origin
  • Gender
  • Religious or cultural information
  • Driving record

Who can see my credit report?

Creditors and lenders can request your credit report from one of the credit bureaus when they have permissible purpose. Examples of permissible purposes are:
  • Issuing credit
  • Collecting debt
  • Underwriting insurance
  • Potential employment
  • Issuing government licenses
  • Business transactions that were initiated by the consumer