Creditworthiness – it’s not worth hiding the truth from the bank
March 29, 2020
To increase your chances of getting a mortgage, applicants sometimes try to show that they have almost no expenses. Minor inaccuracies already reduce creditworthiness, but a lie can cross your credit chances. An assessment at freekuzen.com
The fact that bankers applying for a mortgage want the best in the eyes of decision-makers is nothing wrong. What’s more, people who have not taken loans before, are advised to buy something in installments or borrow money for any purpose and to give them back conscientiously. All this in order to have a tangible proof for the bank’s credibility and solidity.
Also on the revenue side, it is worth ensuring that all additional documents are documented, even if they are very irregular. They will be taken into account at least to some extent when assessing creditworthiness. However, it is important to try not to present the best picture of the state of your finances with the truth. The effect will be the opposite.
Without a car and a child
Credit applicants often think that they will increase their chances of credit when they hide the reason for spending money. Having children is indeed an expensive pleasure, which is why it often happens that potential borrowers conceal this information in their applications or forget that they have two children, not one.
Similarly, they approach the issue of owning a car and fuel expenses as well as operating costs – a chief analyst at Good Credit. Bank analysts have many ways to check the truth, but the simplest is the account statement and the history of operations on it.
After all, we often pay for fuel with a card, transfer funds to school or kindergarten tuition fees, regularly shop in stores with children’s accessories or pay by transfer for winter tires for a car bought at an online auction.
When a bank analyst analyzes the history of our payments using a card or directly from the account, he can read a lot there. The fact of having children also comes to light in our tax returns, when relief for children is entered in the PIT tax return. The fact that when taking a mortgage a PIT bank will not ask you can forget. There is also a chance that the sum of deductions will escape the attention of analysts.
Credit? I forgot
Forgetting about other financial obligations is almost a standard. Unfortunately, this seemingly innocent lie we are crossing out our chances of getting a loan. All you have to do is look at the base of the Credit Information Bureau and you can see everything there. Customers’ reaction to the information that they have a loan is priceless and the same translation is usually heard: “Oh my, I still have the loan and I forgot”.
Confusing gross income with net income is also a common mistake made by customers. Four thousand dollars net does not sound bad, but as it turns out, however, this is the amount of gross earnings, the creditworthiness of the potential borrower decreases drastically.
The more, the smaller the chances
Often, future borrowers think that they will increase their chances of getting a loan when they simultaneously apply for credit to several banks. As noted by expert Good Credit, in practice it is quite the opposite. – Unfortunately, the effect is the reverse, because for each loan application the bank will send a request for our credit history to Credit Checker – he explains. – Inquiries are recorded by this institution.
Therefore, at the time of many inquiries in a short time, each subsequent bank may have suspicions as to their number, and also begin to wonder if in previous cases something could be found that caused a negative decision and led to the submission of an application to another institution.
Experts agree – in contact with a financial institution, it is not worth “tuning” our finances, because the truth will always see the light of day and at best such attempts will be treated as a mere mistake.
However, sometimes it may happen that our attempts to increase the chances of credit will be recognized as a violation of the law by concealing the truth and even trying to extort. This may strike a chance for a home loan for a long time.
Cleanup before credit
The fact is, however, that before you start applying for a mortgage, it is worth organizing your finances. Opting out of a credit card or account limit is an intentional procedure. Even if they are unused, the bank treats them as a real burden. It is worth remembering that an additional two hundred or three hundred dollars of additional liabilities may mean creditworthiness of several tens of thousands of dollars.