“A credit rating is an opinion about the financial strength of a company and its ability to pay its debts and corresponding interest. It is a tool for risk assessment and, as such, provides investors with a simple and objective indicator of risk of default to supplement your own credit assessment. (Business Finance and Philippine Business Firms, Nenita D. Mejorada, 2006)

Some of us are willing to give up the complacency and security of a regular job to start a business. We are willing to invest our money in a business where we can be our own master and employer. We carry out feasible studies, build our network and offer our products through social e-commerce. But getting into business means having the acumen to seize opportunities. We must know our target market, the goods and services our market needs, the growth and stability of our business, and the financial resources we have.

There are a plethora of trading opportunities to try out. Many of us are willing to grab them, but we don’t have enough capital to do so. We can gradually save from our monthly paycheck, invest our money in assets, or if we’re lucky, we can make use of what our family has. Another option is to approach other parties that are willing to invest in our business. But most people choose to take out loans for their business capital. These days, banks are more than willing to offer assistance in starting a capital. This is what makes the credit report an essential source of information to obtain the approval of a loan by the banks.

What’s in a credit report?

Your credit report contains your credit history: the types of credit you use, your account payment history, recent credit and loan applications, and the amount of credit you’ve used. Your basic information, employment history are also included.

This data is being used by the credit bureaus to generate your credit scores so you can access your financial situation.

Security of a credit report

We see a number of credit reports available online. We see advertisements inviting us to view our credit report online and score with the click of a button. Initially, we are curious about our credit scores and how we can improve our assets.

But finding a reputable credit report is also an important thing to consider. The information in the credit report and its security are based solely on verification of the legitimacy of a credit bureau. It must be valid and legal.

Having an insured credit bureau will provide us with a privacy policy that gives us details about how our information will be used. They ensure a safe place for our information, which is crucial to safeguarding our data.

Personally Identifiable Information (PII) or Sensitive Personal Information (SPI) should be highly prized due to the threat of identity theft. It is essential that everyone cares about the security of their information to avoid future problems. Source: CIBI Information, Inc., a credit bureau in the Philippines (http://www.cibi.com.ph)

Good credit for financial freedom

Managing our credit plays a vital role in our financial lives. It is essential not only to obtain a strong credit history, but also to qualify us for a better option to access our line of credit. The knowledge we have about credit management gives us control over our future. It is better to be equipped especially when it comes to our finances. And when it comes to finances, it goes hand in hand with planning for our future. Financial management takes us away from the obligations that can prevent us from earning financial failures. Securing a credit bureau gives us back that financial freedom.