When getting a credit there is a big amount of features, to which the bank pays attention to. In this article we will discuss most common of them and make a portrait of a perfect borrower.
When you are coming to the bank to get the loan the banking worker will definitely pay attention to these factors while decision making.
- Type of employment
- Credit history
Of course here are presented not all the important factors, but the basic ones.
Many bankers insist that every credit loan application is considered individually. However an individual approach to banks is increasingly becoming a unified one. Banks analyze repayment of loans already by available borrowers and on the basis of this analysis make scoring models. The applicant for the loan is assessed on a number of indicators, for each indicator it is charged a certain amount of points and the decision to grant or deny a loan is made based on the amount of these points.
The art of evaluation of the customer in unsecured loans is to go to a specific risk. Indeed late payments can be made by honest customers too. It is important to carefully analyze the situation. In 30% of cases the cause of the delay is that the customer has forgotten to pay, in second place is irregular receipt of salary and the third is an illness or job loss. The important thing is to correct in this regard this approach and reduce the credit limit. Only about 2% of borrowers are persistent non-payers.
If an applicant for a loan already pays one or more loans, the bank may refuse him to another loan. This will not happen if the amount of payments on all loans will be small. But if the calculations of loans exceed half of the confirmed income, then the bank will likely refrain from working with such a debtor.
Portrait of a borrower
Adding the above information, ideal for the majority of banks applicant for the loan must meet the following criteria:
- Age from 25 to 65 years;
- Official employment for at least six months at the same place or the availability of alternative stable source of income, such as retirement benefit;
- The official monthly income needs to be average or higher, depending on the desired amount of the loan;
- Certificate of income in some banks is not necessary option, but it will serve as an additional argument in favor of a positive decision on your application;
- Absence of negative credit history;
- The finishing touch to the portrait of the ideal candidate is a history of service in that particular bank. Suitable will be the previously extinguished loans without violations or opened deposit.
Hopefully that you have never had problems with banks and are a honest customer, so there will be no problem in getting a loan. But if something is wrong and you have a proof that you have a realistic reason of the delay like timeout of the paycheck or unexpected illness.
Joanna Johnson, manager in the field of financing gives recommendation to the people with bad credit looking for mortgages in Toronto.