How The Banks Choose The Credit Borrowers. Part 2

The following stage is when the questionnaire passes check on presence at it of stop factors. Especially it concerns cases when credit strategy is focused on local population. There are refusals also because of professional activity of the borrower. Most of all in this sense hasn’t carried to attendants of the law. Small banks carry these professions to the risky group. The age concerns stop factors also. If the person has already retired it is also will be very difficult to obtain the credit.

Except stop factors are considered also so-called go-factors. For example, credit history. If the borrower already had successful experience of repayment of credits it will be for him a plus at reception of the following credit.

And only after the data, stop factors and go-factors will be checked up then the scoring begins. The bank analyzes a kit of various characteristics of the client and charges points for everyone depending on the importance of an indicator. Following the results of such analysis the decision is made whether to give out the credit or to refuse or agree about interest rate climb under the credit.

Which facts from the biography of the borrower will be interesting to the creditor, is determined by its strategy of crediting. Usual scoring card contains the list from various questions. Their quantity can vary depending on bank from five to fifteen. What exactly it for parameters and what value they will have at the decision of a question on the credit issue, the extraneous person can’t learn. Such privacy is the result of high cost of the given technique. The bank can or purchase it from the developer, or develop independently, leaning on own “credit cemetery” (base of non-payers).

The second variant is cheaper, but at the same time losses from outstanding borrowers of credits can exceed initial benefit because the bank should lean at the beginning only against the documents confirming ability to meet payments of the client. This experience can manage to bank both in hundred thousand, and in millions dollars. On the other hand, purchasing of scoring cards also will be a cheap variant.

In a general view the scheme of scoring looks so. In the beginning each potential customer gets some standard point. For example, 500. Then the age of the borrower it is exposed to estimation. If the borrowers is from 21 till 25 years old from an initial point it is taken away 140. If 26–27 years old – 120 points. At age from 28 till 30 years it is subtracted nothing. After 30 years points grow. For example, at age from 30 till 35 years 20 points, till 45 years – 50 points and so on are added. However here again there are limits. More often, when the person retires, access to credit resources is closed, because as it was told above, it is the stop factor.

Do you still remember those good times when practically anybody could take a credit if one required cash? And just imagine the state of those who have to bear that burden nowadays when the world economy is facing tough times. And for those people having credits the matter of credit monitoring is as urgent now as never before. It is not only about credit monitoring, this also helps save money, time, and nerves and be quick in solving loan related problems. Those who are looking for a place where to learn about credit monitoring, are invited to check out this credit report monitoring site – there is much information about credit monitoring and how to order that service.

Also we haven’t forget about possibilities provided to us by modern technologies. The Web network provides us with a really unique chance to find what we want or to obtain anything on the best terms which are available on the market.

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