Are you a broker working with Chinese customers? A credit report from China may form an important part of your assessment of the client's needs and requirements.
In Australia, if you are going to apply for credit or a loan, you will be asked to provide a report about your credit history from a credit reporting agency. Lenders require a copy of your Credit Report to assess your ability to repay credit. Credit Report providers in Australia include:
- Dun & Bradstreet
- Tasmanian Collection Service, and
Both brokers and lenders can contact one of these credit reporting agencies to obtain a Credit Report for an Australian customer as part of the loan or credit application assessment. This report provides a credit score to represent your customer’s credit worthiness and records certain dealings with credit providers and a history of credit applications.
So, your customer can sometimes feel a bit like they are taking a test! However, did you know that Australian borrowers are not alone in the world in this respect?
In China, local borrowers also take the same test when applying for credit or a loan. They need to provide the lenders with a Credit Report which is issued by Chinese authorities in order to qualify for any credit or any kind of loan. Interestingly, we can see that there is a very similar reporting structure in both countries by comparing a Chinese Credit Report to an Australian Credit Report.
Credit Report Providers in China
To improve credit management efficiency in China, the Chinese Central Bank - the People’s Bank of China - has developed a robust credit reporting system like the one provided by Equifax and other credit reporting agencies in Australia. The People’s Bank of China worked in collaboration with all Chinese lending institutions to develop a convenient credit enquiry platform – the China Credit Reference Center (CCRC).
CCRC is an independent credit information service institution. It is used to establish, operate and maintain the national centralised commercial and consumer credit reporting system for individuals and credit active enterprises. CCRC constantly updates its credit database – which is linked to all local lending institutions - each Monday. Today, this system is the largest of its kind in the world, covering over 850 million consumers and nearly 20 million business enterprises and other organisations across China.
Getting a Credit Report in China
In China, an individual may access his/her own credit report in one of two possible ways:
- In-person. They just lodge a query at a local branch of the People’s Bank of China in 31 provincial cities across China; or
- By logging onto the CCRC credit report inquiry website (https://ipcrs.pbccrc.org.cn) to make an online inquiry. Currently, this inquiry website is only in Chinese - there is no English version
A Chinese Consumer Credit Report is mainly used by lending institutions for the purposes of credit acquisition and management. It can also be accessed as part of pre-employment background checks, pre-rental background checks, etc. Banks, prospective employers and others (including Mortgage Brokers and lenders in Australia) may access an individual’s Credit Report, but only with consent from the individual concerned.
Checking a Credit Report from China
In China, a consumer Credit Report consists of four key sections: basic (or demographic) information, credit payment information, public records and query records.
- The basic information section lists an individual’s identification information, such as name, ID type & number and marital status.
- The credit payment section contains the details of an individual’s credit history on personal loans, credit cards, mortgage loans, guarantee and other credit accounts. It forms the core of the Credit Report.
- The public records section includes information on the individual obtained from public administration authorities which can show his/her creditworthiness in the areas of civil judgments and enforcement from courts, tax arrears and administrative penalties, etc.
- The query records section lists each Credit Report query that has been made by creditors in the preceding two years.
These four sections record and integrate an individual’s credit performance in an objective way, and show a comprehensive, accurate and updated picture of an individual’s credit status. It can be regarded as an individual’s “economic ID card” in China.
CCRC’s mandate is to enhance the availability of information on creditworthiness, in order to remove a significant barrier to promoting responsible lending in China. The introduction of online credit information has also shortened the distance in the financial field between China and Australia.
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