Though banks have a major interest in loans issuance, they do to give loans to people too easily. There are many reasons for it. When the financial crisis of 2008 happened the banks understood it is a bad idea to issue too many loans without guarantee.
That is why the banks check the credit history of the client. A credit score is the score assigned to each borrower. If the person pays the monthly interest in time he will be assigned a high score. If he fails to pay until payment due date, his profile will mark a low score one.
People can have either:
- high score;
- low score;
- no credit history.
Banks prefer to check the credit history of the client, but for small loans, they can make an exception. For bigger loans, the banks are obliged to get the client’s history record.
What can help a client to make the bank trust him
If a person does not want a bank to check his credit record, it won’t be that easy to get even a small credit line. Though, it is possible. There are several things that can assure the banker to issue the loan. Here are the arguments to issue a loan:
- A person is employed and has a high salary. Naturally, if a client has a job, most probably, he will pay the interest rate. If the person works at the reliable firm he will surely be paid the salary timely and accurately and therefore, won’t be late with payments to the bank.
- A borrower is a student. Students are trusted. The banks developed special students credit cards. If a student proves he is a student, he will get a small credit without having borrowed from the bank before.
- A borrower has a co-signer. If a person takes the loan but asks a person with the good credit history to guarantee the loan, the financial institution will issue it. A co-signer is needed to guarantee that the monthly payments will be done. So, if a client can’t pay, a co-signer is obliged to do so.
These arguments can persuade the financial institution to issue the loan. Though, how loyal the bank is, it will depend only on corporate regulations. Many banks require the check for each every client without exceptions.
Why it is important to have the high credit score
If you got the loan once without having been checked a credit score, be sure the next time you want to get one, it won’t be that easy. The governmental agencies can ask the banks to issue credit reports on a particular client any time. There is no way the bank can avoid doing so.
That is why it is very important to be a responsible borrower and to have a positive record. It has many advantages. It provides an opportunity to get big loans for personal or business purposes. Without a credit history check, it is hardly possible to get big sum loans.