Loans are a very popular form of financing your plans. Research shows that at the end of 2016, over 15 million people had credit products. Loans are taken for various purposes, from small expenses to real estate purchases and large investments. It can be safely said that having a loan is a common and frequent phenomenon. However, research also shows that few people are interested in the borrowing process itself and they know very little about the procedure of financial institutions before deciding to grant a loan. It all starts with creditworthiness.
It is on this basis that the credit bank may grant or refuse to grant it to us. That is why checking your creditworthiness is one of the most important things to do before you apply for a loan. It is worth focusing on what is most important for the bank when analyzing the client’s ability to repay the loan. However, you have to start from the beginning – find out what it is and how to check your creditworthiness.
What is credit standing?
Creditworthiness is nothing other than your ability to repay the contracted liability within the time limit specified in the contract and with interest due. Most financial institutions will check your creditworthiness before making the loan decision. It consists of several things: the amount of remuneration, the type of contract with the employer, the duration of the contract or the duration of the business, the amount of credit obligations you already have, and how you have paid them off so far. Unfortunately, delayed settlement of arrears, failure to pay their liabilities or being late with installments is recorded in various information databases. These include, among others, the Credit Information Bureau or the National Debt Register. Most banks will check you on these bases before proposing to sign a loan agreement.
If there is information about the fact that you have arrears to other banks or you are delaying your obligations – your chances of getting a loan are very small.
What do you need to know before checking your credit standing?
You need to know a few things to learn how to check your credit standing. By entering the search term “calculate creditworthiness” in the search engine you will meet banking terms that you may not have dealt with before and it is worth being prepared to know what to look for before signing a loan agreement. Your credit scoring will be taken into account when assessing your creditworthiness. This is a method of assessing your credibility. Points are scored in scoring, the more points, the more reliable the customer.
Interestingly, the more reliable the customer, the better the loan offer he can get. Several things affect the scoring result, including your profession, education, housing status, social status, your property, marital status or the frequency of changing jobs. If you have savings, health and life insurance, be sure to talk about it when talking to your advisor. This can have a significant impact on your credit scoring. Remember, however, that there are factors that will reduce your scoring. These include: a large number of currently paid liabilities, problems with timely payment of installments, low remuneration in relation to the amount of monthly installments.
Calculating creditworthiness is therefore a more complicated process. Therefore – given that it varies from one financial institution to another – your creditworthiness may also have different values. Often there are situations in which one bank offers great financing conditions, because the customer’s creditworthiness is very high, while in another the customer will receive a negative decision or worse credit conditions.
Creditworthiness check and creditworthiness calculator
It is also extremely important to check your credit standing using calculators specially created for this purpose, but without sending a loan application to the bank. Why? Well, the bank, which aims to check creditworthiness, will send a request to BIK about your obligations and timeliness. In the inquiry you will find information that you are applying for a loan in a certain amount. A large number of these types of inquiries will lower your scoring, because it is for the bank information that you are looking for a loan, and if the inquiries are sent often, then probably some institution has refused to grant it to you. Even if this is not true, banking systems can be relentless here. Checking your creditworthiness does not require sending an inquiry to the Credit Information Bureau. If the bank uses tools such as a calculator and current procedures – it will definitely provide you with basic information regarding your creditworthiness.
If you decide on a specific offer, then you can apply. Only then sending a request to BIK to share your credit history makes sense. This practice is often used when applying for a mortgage. Customers collect offers from several or several different banks, but they usually submit applications in a maximum of three. This is directly related to sending inquiries to the Credit Information Bureau.