Banking organizations are interested in conducting a large number of credit transactions, but they try to identify those borrowers from the total number of applications, transactions with which will be safe. For this reason, they are in no hurry to sign a contract for many loan programs.
Communication with a potential borrower
Even if a person submitted a credit application via the Internet, they may be invited to the office of a banking organization. At this time, the borrower will need to bring all the documents, as well as answer a number of questions. Sometimes it may seem that the credit specialist asks questions that have nothing to do with the credit transaction. This is not entirely true.
Questions about the presence of children, their names, questions about the way from home to work, etc., help the specialist of the credit department to understand whether the borrower is really who he claims to be or whether the loan is wanted by a fraudster who plans to disappear with borrowed funds. In addition to the questionnaire, the Manager’s opinion is attached, which has a significant impact on the decision on the application.
Contacting the BKI
At the next stage, the banking organization sends a request to the credit bureau to find out more about the person who wants to become a borrower. Such requests are processed quickly, but it takes some time for specialists to study the report. It is worth noting that customers with bad credit histories do not always receive a categorical refusal, some banks agree to make a deal, but on condition of providing collateral or a significant increase in the interest rate.
Every day, banking organizations receive not a small number of loan applications. Employees do not always manage to process them manually, so a special scoring program was developed that calculates the risks of a financial organization based on the data provided by the client and makes a decision to refuse a loan or agree to a transaction.
Each financial institution can set up a scoring program at its own discretion. The bar may be overstated if the bank currently has a sufficient number of credit clients and wants to enter into transactions with minimal risks. This bar can also be lowered when a bank seeks to increase its loan portfolio.
This service is available in every financial organization, but it can be called differently. The security service is not always involved in reviewing the loan application. When making transactions for small amounts on simple programs, it is enough to solve the scoring program. If the borrower wants to become a participant in a serious program, which implies the issuance of a large amount of money, then specialists are involved in reviewing the application and checking all documents.
This service can submit requests to different instances to check the borrower’s reliability. Such checks take time, and therefore it takes up to three days to wait for a decision in such cases.