New Delhi, Feb. 7 -- History holds significance as it helps understand past events, which aids in making sense of the present, and taking informed decisions for the future. For financial institutions (FIs), such as banks and non-banking financial companies (NBFCs), understanding the history of a customer in terms of how he/she has managed credit in the past is critical to make quick and efficient lending decisions.

In the domain of personal finance, the statement of this credit history is referred to as a credit report, which is equally if not more important for borrowers. Simply put, a credit report is a comprehensive document which contains a person's borrowing, as well as payment history. It includes:

A good credit report is a reflec...