What exactly is the meaning of credit?

Most banking and financing institutions from list of licensed lenders in singapore offer different kinds of credit and loan products. From credit cards, signature loans, to mortgage and business loan, consumers are becoming more aware in the world of credit. However, some people still lack of financial information and discipline before they can get any credit from the banks.

The first thing that you need to know is what exactly the meaning of credit. Credit means that you are getting a service or cash grant to rent for your own purpose. You are often bound with a contract or agreement to repay in future as agreed with a money lender or service provider. Credit exists in different forms like loan, mortgage, signature loan, or credit card.

Each banking institutions or lending companies will first check a person’s credit history, before they will consider giving a credit. If you have defaulted on credit or loan before or have bad credit report you will find it almost difficult to get credit any time you apply for it.Credit report is a compilation of your credit history, past financial transactions and personal information possible. This report is usually compiled by accredited agencies known as credit reporting agency.Credit reporting agencies are organizations that help credit card companies, loan companies, banks, and departmental stores in the country to ascertain the credit worthiness of their would be clients.Once they have detail information from these sources, they give it to any organizations in need of it when requested. Though they keep on file information concerning you and your credit, they don’t make final judgments as to your credit worthiness. The decision is up to the credit card companies or any lender which you are dealing with.

The credit score is very important in any financial institution if you intend making any loan in the future. That’s why it’s good you know what exactly your score is, understand its meaning and learn how you can improve it if it’s not good enough.Make sure that you study the terms of any of the loan products that you pick very well to avoid risking your credit rating. So make sure you thoroughly look over the bank’s terms and conditions of each specific services before applying for your next loan.