Defaults are putting people in trouble while they get a loan. Understanding what happens to our application after it is submitted for approval is extremely important.
So it's smart to learn what they're looking for before you submit a loan application. This requires two steps until we present a loan. Also, different lenders calculate the credit score by using their particular methods.
- Manual checking.
- Automated credit process
The manual checking comes first. In this they read the credit report to check is there any default you have had in the last five years? If there is any default found then it will bring you in trouble. If it is bad enough then they shut the file and declined the loan approval.
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In an automated credit process, they have a matrix of questions that you must have to satisfy. If all these fill their criteria, then approval is given to you but if your application does not fulfill the bank's criteria, the bank does not approve the loan.
But in this case, you can appeal and they will reveal and can change the decision. The application form goes into the credit processing of the institution. This show covers the last 5 years.
- Shows all applications you have made for credit
- Shows any defaults you have had.
- Any current defaults are unpaid.
- Any associated companies or business activities.
- Any bankrupts on financial or court actions.