Think about it for a second; you wouldn’t loan money to someone you didn’t know – or didn’t know anything about, would you? Financial institutions feel the same way.
And, since we’ve moved well past the days when community banks considered the personal reputation of a borrower who’s banked with them since the beginning of their financial history, we need another way to determine the financial reliability of borrowers.
That’s precisely the motivation behind credit reports. And, to secure a loan of any kind from just about any source, you’ll need to get your hands on yours.
But, it’s not always easy for everyone.
Credit reporting is different across countries
Your credit report is a reflection of your financial health, but the information you would see on an American credit report isn’t the same as you would find on a similar document in Australia, India, Singapore, or France.
As every country’s banking system developed, national credit reporting norms grew up around them. In France, for example, there’s a history of reporting only the negative aspects of a person’s credit. You find similar practices in Australia, Portugal, and Spain.
In some countries governed by Islamic principles lending presents hurdles that have prevented the development of a robust credit reporting system. In the United Arab Emirates, the first credit reporting bureau, Al Etihad, was only established in 2012 – and the first reports were only available online in 2015.
In contrast, Singapore and Hong Kong have credit reporting systems that surpass those found in the United States and the United Kingdom.
As you would expect, it’s a little more time-consuming to obtain your credit report in a few heavily bureaucratic countries. In countries like China and Russia, it’s best to get started as early as you can to avoid processing delays – especially if you are at all eligible or considering an international loan.
It’s not just what’s on your credit report or the development of credit agencies that differ either; different countries require you to apply for these reports through diverse agencies. In the US, for example, there are plenty independent credit reporting agencies. In the UAE, the new bureau falls under the auspices of the government. In Brazil, you’ll find a variety of private and public reporting agencies.
And, while it’s hardly universal, there are countries that regulate free access to personal credit reports by stipulating that individuals receive a free report annually. (Keep in mind that you usually need to request this document; credit reporting agencies have no idea when you have the headspace to deal with your financial well being.)
You can find links to several reporting agencies in a variety of countries in the Prodigy Finance FAQ pages. (Updates will be made occasionally, so feel free to check back or reach out to info@prodigyfinance.com if you’re stills stuck.)
Credit reporting is non-transferable
We’re sorry to say, but the wonderful credit score you built up in your home country doesn’t transfer across international borders. Just because Canada and the United States share a border, they don’t share credit reporting standards.
That’s true even though you’ll find key independent reporting agencies, such as Equifax and TransUnion, operate in both countries. Indeed, you’ll discover that these companies, along with Experian, provide credit reports in dozens of countries.
If you’ve never had to obtain a credit report in the past, you’ll want to see if any of these three companies operate in your country before investigating other options; they truly understand credit reporting, customer service, and country regulations.
But, they still can’t transfer your credit rating from one country to another because every country, as we’ve seen, has different reporting standards.
That’s precisely why it’s almost impossible to secure a loan in a host country as an international student; the banks have no way of discerning your financial well-being even if they have access to your credit report. Banks need to judge apples against apples and can’t deal with oranges.
If you’re hoping to remain in your country of study for a few years after graduation, you’ll want to build and establish credit where and how you can during your studies. But, you don’t want to avoid using credit cards in your home country while you’re away; as the lack of traction on your accounts usually leads to lower credit ratings. While it’s not always the case (depending on the credit reporting system), financial reporting is moving in that direction.
Your credit report and your Prodigy Finance loan
If you’re investigating a loan from a bank or financial institution in your home country, you may not need to obtain a credit report; your bank is likely to handle that directly. However, if you’re obtaining a loan from an institution in your host country, you will need to obtain a credit report, and there may be stipulation regarding the timeframe.
The same goes for obtaining a Prodigy Finance loan. You will need to upload a copy of your credit report after receiving and accepting your provisional offer. It’s not the only document that’s needed, of course, but it’s impossible to proceed to the next step without it.
Prodigy Finance may have a strong community component, but it is still an international lender – and you wouldn’t provide a loan to a stranger either; would you?
