Credit references are documents that show the credit history of loan applicants and are also often used to support rental applications. The information on a credit reference shows an applicant’s credit history so that lenders and landlords can determine whether an applicant is likely to make timely payments. For example, if a credit reference indicates that an applicant has paid his or her debts and other obligations in a timely and appropriate manner, a lender or landlord will be more inclined to approve the requested application. However, if a credit reference shows that an applicant has not paid the outstanding obligation in a timely manner or for the appropriate amount, a lender or landlord may deny an application as the individual would be considered a liability. 

When you need credit references 

Credit references are requested when an individual requests to borrow money from a lender or to use a service. There are several situations when a credit reference may be requested. Some of the most common situations include:

  • Loan applications. When an individual or business applies for a loan, lenders almost always require a credit reference. These references let a lender know whether or not the applicant will pay back the money that has been borrowed from the lender. 
  • Rental applications. Landlords often request credit references with rental applications. The information presented on the credit history allows property owners to determine if rental applicants will make timely payments. 
  • Utility services. Credit references are also often requested for utility services such as electricity, gas, cable, or phone services. Companies that provide these services may require a credit reference prior to activating accounts to determine whether or not you have a history of making timely and appropriate payments for similar services. 

Types of credit references 

A credit report is the most common type of credit reference. This document is an account of an applicant’s credit history. Credit bureaus, including Equifax, TransUnion, and Experian, provide credit reports for individuals, while credit rating agencies, including Standard & Poor’s (S&P), Fitch Group, and Moody’s, provide credit reports for businesses. 

Credit reports aren’t the only type of credit references. References can also include letters issued from reliable sources, such as a credit card company, a past landlord, or a utility provider that illustrates your creditworthiness. These forms of credit references may be used to demonstrate the creditworthiness of individuals or entities that do not have sufficient credit references on their credit reports like entrepreneurs applying for a loan for their first business venture or recent college graduates attempting to rent their first apartments, for example. 

If you are intending to borrow money from a financial institution, rent an apartment, or secure services, it’s important to know which types of credit references you can use. 

Credit references 

A variety of documents can be used as a credit reference depending on your circumstances. Below, we highlight the documents most commonly used as credit references and the effectiveness of each option. 

Credit report

Credit reports are the most commonly used credit references. They’re also the most important references, as they provide a detailed overview of an applicant’s credit history. Credit reports are the foundation of credit scores and are used by all lending institutions to determine the risk associated with approving an applicant. 

In addition to lenders, a variety of other entities may request credit reports. For example, landlords may assess a prospective tenant’s credit report prior to approving an application; employers may view a prospective employee’s credit report before hiring. Insurance companies often review the credit reports of new and existing customers before quoting a price for a new or renewed insurance policy. 

Credit reports are highly effective credit references. They contain valuable information pertaining to an individual’s creditworthiness which can be used to illustrate an individual’s reliability. 

New: Transfer your credit history to the U.S.

You can now use Nova Credit to translate your international credit history into an equivalent report for U.S. lenders. Companies partner with Nova Credit to incorporate that information directly into their application process and make it easier for you to get approved for credit cards, loans and other products. Once you establish a U.S. credit account using the credit you’ve earned, you can start building a local credit history.

Nova Credit currently connects to international credit bureaus in Australia, Brazil, Canada, India, Mexico, Nigeria, South Korea and the UK.

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Asset documentation

Asset documentation can also serve as a credit reference. These documents are issued by the financial institution that manages an individual’s assets like savings accounts, retirement funds, stocks and bonds.

Assets can illustrate the creditworthiness of a prospective applicant. For example, individuals who possess substantial assets are likely to manage their money effectively, and therefore will likely be responsible borrowers. You will need to ask the financial institutions who manage your assets to furnish records and supply them to prospective lenders. 

Asset documentation is considered a highly effective credit reference. 

Financier support documentation

Financier support documentation can also serve as a credit reference. This type of documentation is similar to asset documentation; however, instead of illustrating the assets of an individual, it highlights the assets of a business entity. For example, those who financially support a business can provide documentation that illustrates its access to capital.

Business owners applying for loans or services that require credit references can ask their investors to furnish statements that showcase the amount of capital available to the business. 

Financier support documents are considered highly effective credit references. 

Character references

Lastly, character references can be used as credit references. While these types of credit references are not as effective as credit reports, asset documentation, and financier support, they can be useful. 

Character references are documents issued by reliable resources such as past landlords, previous employers, and utility companies that an individual has had accounts with, for example. A character reference highlights the experiences the individual or entity has had with the applicant. It can offer information about the character of the applicant and how responsible he/she is with regards to managing important tasks. While they do not provide detailed information about an individual’s past financial obligations, those who supply character references can illustrate whether or not an applicant has successfully managed various responsibilities, including debt payments. 

Character references can add context to other components that pertain to an individual’s financial background and help to establish creditworthiness. 

Credit reference suggestions

Submitting a credit reference to the entity or individual requesting information isn’t enough to ensure its efficacy. The reference needs to successfully illustrate your creditworthiness in order to be effective. Below, we offer suggestions that you can use to improve the success of your credit references and increase your chances of securing a loan, a service, a rental space, or any other service you might be hoping to acquire.

Keep track of your credit report

A credit report is the most widely used credit reference and has a big impact on the outcome of a loan or rental application, or a service request. 

Review your credit reports frequently. There are several tools that provide free credit report assessments. Ensure that your reports are error-free and contain no evidence of fraud, as both can bring down your credit score. If you notice issues, contact the respective credit bureau to rectify any problems. Ensuring your credit score is in good standing is vital, as lenders, service providers, landlords, and even employers are more likely to approve your requests when your credit is in good standing. 

Work on improving your credit

If your credit is less-than-perfect, try to improve it. Paying your bills in a timely manner, paying down debts, and eliminating outstanding balances may have a positive impact on your credit score. Hold off on acquiring future debt, especially if you are attempting to secure a loan. If you do acquire new debt, such as a credit card, make sure you manage it wisely. If your current credit report is lacking, consider building your credit with a secured credit card. This type of credit card can be an effective way to establish your credit when used responsibly. 

Use character references to illustrate your creditworthiness

Although character references may not have as much weight as a credit report and other more effective credit references, they can be valuable assets. Character references can explain any concerns that pertain to your credit history. Character references can also illustrate the ability to manage responsibilities, which can be especially helpful for individuals with limited or non-existent credit histories. 

Request a reconsideration 

If your loan or service request is refused, you can ask the entity that turned down your application to reconsider your application. Send a reconsideration request, along with reliable character references, to the entity that has denied your initial request. Explain any shortcomings that may have led to the refusal of your initial request. Provide documentation that supports extenuating circumstances. Send character references that highlight illustrate your track record of managing past debts and other obligations. These documents may encourage the entity to change its initial response to your application request in your favor. 

How to secure a credit reference letter

If you are applying for a loan, a service, or a rental property, you will likely be asked to provide a credit reference. It’s important that you know how to secure the reference so that it meets the requirements of the lender or service provider who requires it. 

The following tips can be used to secure a credit reference and ensure that it fulfills the requirements of the requesting individual or entity.

Confirm the requirements 

Verify the reference requirements of the lender, landlord, or service provider. If the letter does not adhere to the entity’s requirements, it won’t have much of an impact, and may not improve your chances of receiving a positive response.

Some entities that require reference letters offer templates that previous lenders, service providers, employers, and other reliable resources can fill out with the necessary information. 

Send a request

Make contact with the previous employer, service provider, landlord, or another reliable individual you intend to use as a character reference. If he or she agrees to provide a reference, share instructions or a template to ensure that you comply with your credit reference letter requirements.  

Issue authorization

In order to release information about account histories, you may need to provide permission. Find out whether or not you do need to issue authorization, and if so, how you grant permission. You may be able to issue authorization online, or you may be required to fill out certain forms, for example. 

What’s included in a credit reference letter

The information a reference letter contains will vary, as each entity will require different details. For that reason, verifying with the individual or organization that is requesting what needs to be included is important. 

The requester will usually provide a form that must be completed by the reference letter supplier. If you do not receive a template, ensure that the letter contains the letterhead of the issuer. Key information that is often requested in a reference letter includes the following: 

  • The capacity of your relationship with the letter issuer; for example, the individual may have issued you a line of credit, supplied your cable, or rented property to you. 
  • The length of the relationship with the issuer. 
  • Payment details such as whether you usually make payments on time and for the necessary amount, or if your payments are late and not for the necessary amount, for example. 
  • Account numbers, if applicable. 
  • The amount you typically pay. 
  • The total amount of outstanding debt. 

The information that a credit reference letter contains depends on the individual requirements of the individual or company that is requesting the letter. 

Sample credit reference letters

A credit reference letter does not need to be lengthy; it just needs to meet the requirements of the letter requester and contain the necessary information. 

Three examples of a credit reference letter are as follows: 

Reference 1

(Name of applicant) has been our customer since 2001. In that time, he has made timely payments for the appropriate amount. No records of late payments or missing payments have been filed. 

Reference 2

(Name of Organization) has been working with us since 2001. The organization has purchased supplies from us on a steady basis and has made timely payments for all supplies purchased. To date, payments amounts for the supplies ordered total $243,000. The account of this organization has never been suspended for any reason. 

Reference 3

(Name of Company) applied for a line of credit with our financial institution in 2001. The total approved line of credit was $150,000. The current amount owed on that line of credit is $3,432. To date, we have received all payments in a timely manner, and all payments have been made in full. No late payments or missing payments have been reported. 

How to improve the chances of receiving a positive response

If you are applying for a loan, a rental property, you require the service of a company, you are applying for a job, or you are doing anything else that requires a credit reference, your goal is to receive a positive response. A credit reference can either help or hurt your chances of receiving the results you want. The following tips can improve your chances of a positive outcome. 

Find out all pertinent information 

Before issuing any information, make sure you find out exactly what type of information the credit reference requester requires. Failing to include necessary details can harm your chances of a positive response, even if your credit is in good standing. 

Supply information in a timely manner

If a deadline is provided, make sure you collect all requested information far in advance. If a deadline is not provided, it’s still in your best interest to be as prompt as possible when supplying the requested information. 

Provide clarification

If your credit references do not paint a positive picture of your creditworthiness, try to clarify any mitigating circumstances. If your credit score shows late payments as a result of losing your job or illness, make that clear and supply supporting documentation. 

Be transparent

Do not attempt to hide anything. When it comes to credit references, the information can be checked and confirmed. Falsifying information can negatively impact the decision of your lender, landlord, or service provider. The more transparent you are, the better your chances of receiving a positive response.


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