When do you need a credit reference letter?
If you are applying for a business loan, the lender might not be fully satisfied by your credit score. In that case, you would need a credit reference letter. It is letter of reference from a bank, financial agency or even a previous lender that talks about your ability to repay a certain amount of money. It also tells whether your assets are worth the amount you are taking against them or not. A good reference letter can ensure any lender that you will be able to repay the money on time and that lending you money is not a big risk.
In some cases you might even ask for a reference letter yourself. If you are lending someone money, it is a good idea to have reference from a reliable source, especially when you are not being able to trust that person. You can even submit a request for your own credit reference letter from a financial agency or a bank. This could be to access your own situation. If you are planning to apply for a loan, such a letter could tell you the current worth of your assets. This can be helpful in deciding the amount of money you should borrow against your assets. This could otherwise be just to see how your present financial conditions are.
There is one more situation when you could be dealing with this letter. If you are in the money lending business, a previous borrower may request for a reference letter.