Research Assignment Example | Topics and Well Written Essays - 750 words

Research - Assignment Example bad credit history, the rate charged may be higher. It is however, mostly based upon how a company view and rate its customer and subsequently decide what rate to be offered to a customer. Even the interest rates charged on different cards issued by same company differ from each other depending upon the way a customer is rated by the company. Companies attract customers in different manner and according to their target market. Once the target market is identified, there are different means through which companies can attract their target market. One important method for attracting the customers is the rate of interest charged on the credit cards- i.e. if company’s target market is to secure prime customers, they will offer cards at lower rates to attract their desired customers. Further, balance transfer facilities at lower rates are also an important way through which companies attract their customers. When a person applies for any type of loan facility including credit cards and personal loans, financial institutions obtain a copy of credit report of the customer. A credit report is basically just a report which mentions all the obligations of a customer that he or she has to pay off to the financial and other institutions from where borrowing has been made. It not only provides the credit history of the borrower but also give a true picture of the total monthly debt obligations, total debts to be paid by the borrower and any defaults made in the past. (AIE, 2010) In a sense, credit report is the most essential document which determines whether a person can obtain the credit or not. This is so because companies, based on the credit report, not only determine how much loan to be given but also get a clear insight into the probability that whether the customer will pay off the debt or not. Most financial institutions do not extend loans to customers with poor