The day you started to earn money on your own, you realized how hard it is. Sometimes although you work really hard, you may not be paid a sufficient amount of money. But can you give up the job or any other business that you do? No, because then there won’t be any money at all, to live. Both men and women, all of us should understand the importance earning money and we must work our but off to achieve bigger goals financially. If you still don’t feel this, recall your memory and see how difficult was it for your parents to feed you. Every cent was earned in the midst of so many hardships.
Having said that, when it comes to finance and investments, there are various things to consider. Just because you are filthy rich, you shouldn’t go and buy or invest on whatever you want. Although you have the freedom to do, it is not recommended. This is where Hong Kong credit rating comes in to play. It refers to the careful and complete investigation of a product or a transaction before it takes place. It confirms that all details are correct and no important information is left out. Or in simple terms, it is a search that a seller does on a buyer before the purchase of any product or service. He will check whether the buyer possesses enough resources to go ahead with payments and other things related to the deal.
Credit rating would facilitate this process to a certain extent. This is primarily done by a third party which is known as a credit rating agency. They assess the credit worthiness of an individual or an entity and gives a particular rating. In the United States, there are three major firms, namely Transunion, Experian and Equifax. They maintain a database of income and expenditure details of hundreds of millions of people in the U.S. However, it is important to know as to why is it helpful for due diligence.
Let’s assume that you want to invest on a security and you request a brokerage firm to carry out a due diligence on it. As they are legally obliged to do that according to the securities act 1993, they will provide you the details. However, once the broker carries out a reasonable search and passes on the information to you (the investor), after that he is not liable for any dispute arises with regard to any non-disclosure of information that was not found during the investigation. For instance, if you are to purchase a property, then the broker will find out the information such as the identity of the owner, legal documents related to the ownership etc. Upon these details you can decide whether to go ahead or not.
Therefore, be vigilant and diligent.