For lenders, credit bureaus’ collection and transformation of borrower information into a credit score also helps reduce transaction costs associated with lending by providing a standardized benchmark that a lender may use to judge a borrower’s creditworthiness. This can also help in cutting down the turnover time in processing credit requests, thereby promoting operational efficiency.
In fact, banks and the CICs have a symbiotic relationship where both can help each others’ business processes and, thereby, improve their respective efficiencies. Positive and negative data sharing Credit history data can be broadly categorized as: negative data and positive data. The negative reporting includes information pertaining to unfulfilled financial obligations such as defaults, amounts in arrears, court judgments, and other adverse information.