Credit scores are crucial when it comes to getting a loan or credit card. Although credit score is the first thing to be assessed by an underwriter while assessing your loan application, many factors are considered depending on your information. An underwriter who assesses the risk associated with the loan application to protect banks from bad debts.
These factors are not generally assessed, but marginally off the threshold can lead to loan rejection. We are letting you know that understanding these parameters is how you can ensure a loan approval.
Employment Status and Monthly Income – Your stable career and viable income to repay the loan are the crucial aspects ensuring loan approval.
Prior Data – Credit bureaus do not check on your traditional information. However, banks do check all your tiny details also.
Frequent Borrowing Issue – If you are always looking to get new loans, this is considered a negative point while lending you a loan.
Bank Policy – It has nothing to do with a credit score or credit report but, maybe a chance that your loan can be rejected due to the bank’s policy.
Credit Report – With a good credit score, having a clean credit report is an important factor to avoid loan rejection.
Banks do not want loss on the money they lend. Hence, they have strict guidelines and policies for loan disbursal and follow laws regarding bad loans. You must manage all your loan repayment and finances. The benchmark in India for credit score is 750 and above it is considered to be highly desirable.