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What Is A Credit Decision
What is a Credit Decision
Introduction: Credit or borrowing has become a way of trade nowadays, and as a person of the globalized trade community, we should all be aware of the possibilities and the regulations regarding the credits and loans. The credit or lending of money against some form of security is done by most of the banks and the main reason behind this is to stop unscrupulous persons from embezzling the banks. It becomes necessary to check the person’s financial status and other sources of income before considering him for credit. This is due to the fact that analyzing the customer is necessary when deciding upon the loan sanction for to make sure whether the debt would be satisfied or not. This process of decision making is known as Credit Decision.
Loans that require Credit Decisions: Almost all the loans require a proper analysis of the respective person’s financial status before the decision of sanction is to be taken. This credit decision affects how much a person can be loaned, what the rate of interest for the amount should be. The Best example is the credit card type of loan. The credit cards are usually of three main types, the platinum card with the highest credit limit and lowest rate of interest, the gold card with medium interest and medium credit limit and the silver card with the lowest credit limit and the highest rate of interest. These types of cards are sanctioned based upon the financial status of the respective individual. This is checked by the credit report of the person.
Another major type of loan called the mortgage, requires a credit report to be drawn and the sources of income to be established before the loan is sanctioned for the user. The property holdings and the security factor of the loan is extensively examined and noted before the sanction of this type of loan.
Credit Report and Credit Scores: The credit report is the report generated on the person’s financial status, by a third party company. This report consists of all the debts that the person is in, the income of that person, the sources of the income and if the person is paying back the debts in the right intervals at the right times. The Credit report is much of a status report on the person’s financial standings. Since it has all the information required about the person’s financial status, it becomes easy for the banks and credit unions to take the proper decision upon the sanction of the loans. The credit score is generated with the help of the credit report
Good Credit and Bad Credit: The person is said to be in good credit if the credit score averages and is very high. These persons are very much in good financial status and can be given a high priority for the lending of money. The people with very low credit scores are the ones with bad credit and they would not be able to promptly repay the loans.
Conclusion: Thus the person with good credit score is given a higher priority and the credit decision is taken in favor of them. Hence it is necessary to improve our credit scores.
Introduction: Credit or borrowing has become a way of trade nowadays, and as a person of the globalized trade community, we should all be aware of the possibilities and the regulations regarding the credits and loans. The credit or lending of money against some form of security is done by most of the banks and the main reason behind this is to stop unscrupulous persons from embezzling the banks. It becomes necessary to check the person’s financial status and other sources of income before considering him for credit. This is due to the fact that analyzing the customer is necessary when deciding upon the loan sanction for to make sure whether the debt would be satisfied or not. This process of decision making is known as Credit Decision.
Loans that require Credit Decisions: Almost all the loans require a proper analysis of the respective person’s financial status before the decision of sanction is to be taken. This credit decision affects how much a person can be loaned, what the rate of interest for the amount should be. The Best example is the credit card type of loan. The credit cards are usually of three main types, the platinum card with the highest credit limit and lowest rate of interest, the gold card with medium interest and medium credit limit and the silver card with the lowest credit limit and the highest rate of interest. These types of cards are sanctioned based upon the financial status of the respective individual. This is checked by the credit report of the person.
Another major type of loan called the mortgage, requires a credit report to be drawn and the sources of income to be established before the loan is sanctioned for the user. The property holdings and the security factor of the loan is extensively examined and noted before the sanction of this type of loan.
Credit Report and Credit Scores: The credit report is the report generated on the person’s financial status, by a third party company. This report consists of all the debts that the person is in, the income of that person, the sources of the income and if the person is paying back the debts in the right intervals at the right times. The Credit report is much of a status report on the person’s financial standings. Since it has all the information required about the person’s financial status, it becomes easy for the banks and credit unions to take the proper decision upon the sanction of the loans. The credit score is generated with the help of the credit report
Good Credit and Bad Credit: The person is said to be in good credit if the credit score averages and is very high. These persons are very much in good financial status and can be given a high priority for the lending of money. The people with very low credit scores are the ones with bad credit and they would not be able to promptly repay the loans.
Conclusion: Thus the person with good credit score is given a higher priority and the credit decision is taken in favor of them. Hence it is necessary to improve our credit scores.
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