Improve Your Chances of Getting a Consumer Loan by Exploiting the Automatic Credit System
There are no standard score for consumers, similar to the beacon Fico score, that includes the 5 principal criteria (personal credit, stability, debt ratio, net value, occupation and professional status). Most banks and financial institutions have their own system that attributes a more complete credit score to an applicant. Those systems will process the data entered in the computer when a consumer applies for a loan and will categorize the file based on the global score obtained automatically.
When we decide to apply for a personal loan, we have little control over the five criteria, except for the personal credit report that happen to rank first. If the applicant possesses a good credit, there shouldn't be any problems when applying for a loan, but if the credit rating is average or low, without being disastrous, a solution exists to improve the chances of being accepted for a loan . You first need to understand the automatic system that analyzes credit.
Banks try to minimize the participation of actual credit analysts by establishing a discriminatory system that will automatically filter a demand in the category "accepted", "refused", or "to be reviewed by an analyst" (also known as the gray zone) based on the total score obtained. That way, the system executes the majority of the work and banks save big by not hiring more expensive credit analysts. The analyst is only there to review files falling in the gray zone.
Automatic systems are also in place to speed up the process of credit analysis and therefore give a quick answer to the applicant. Great competition exists between banks and other financial institutions for the time response, because many clients will go for a bank that offers a quicker response without taking into consideration the interest rate applicable on the loan.
During the process, the applicant enters their personal information in the computer and when completed, the system analyzes the whole request based on the five principal criteria. If the information of the applicant fulfills the acceptance criteria of the automatic system, the response will be sent directly to the applicant, often with the condition of showing proof of income with the amount declared. The file is not seen by any credit analyst, because the decision was already taken by the system. It is therefore possible to exploit these systems and increase the chances of being accepted automatically or avoid an automatic decline. Here is how.
The applicant cannot modify his own credit report, but he can round up the time at job and the years at current address (stability). This data is rarely verified by banks and weights considerably in the final credit score. By doing that, the applicant improves their total score without entirely lying on his profile, which could be enough to receive an automatic acceptance or avoid an automatic decline. Rounding up the income is not recommended since banks often accept on the condition of proof about the declared income; failing to prove that will put the file under review.
Another option is to apply a good down payment in the case of a mortgage or the purchase / lease of a vehicle, because the automatic system will see equity on the collateral and might send an automatic acceptance before someone had the chance to revise the file. The down payments are in fact the only way for an applicants to compensate for bad credit or even reverse a negative decision.
Many companies are specialized in creating these automatic systems in order to put them on the market, and almost all financial institutions own such a system. Even though there are no standard rating, the five same criteria always come back in the calculation of the total score. Applicants can then use these techniques with any financial institutions to improve their chances of being accepted when applying for a loan.