When you apply for a loan, the lender will want to know first that your loan application is a good risk. This means that they want some solid proof that you can afford the loan and will be able to pay it back. for that matter, loan officer Charles Kirkland states that there are many factors involved in evaluating your creditworthiness before deciding whether or not to approve your loan application.
Determining How Many Risks Your Loan Will Pose
The first step in the process is determining how much risk your loan application will pose for the particular lender. The lender will want to know how likely it is that they’ll be able to recoup their money if you default on your payments.
Most lenders do this step by figuring out what kind of job you have and how much money you make. If your job pays well enough, then they might be willing to lend more than someone whose primary job pays poorly.
Checking Your Credit Score
Your credit score refers to the numerical representation of your credit history. The higher the number of credit scores that you may get, the better chances you will have of getting the loan you need. The most common credit score is the FICO score (which stands for Fair Isaac Corporation), determined by your payment history and debt-to-income ratio.
Reviewing Your Income And Employment History
Lastly, when you apply for a specific loan type, the lender will want to know about your income and employment history. This information is used to assess whether or not you can afford the loan and if it makes sense for them to lend money to someone like you.
Charles Kirkland need to be honest when answering questions on your employment and financial status, because if there are any inconsistencies between what’s on your loan application and what the bank finds out through their own research, they may reject your loan application outright.