Defaults put people in trouble while getting a loan. It is very important to know what happens to our application after its submission for approval. So it is wise to know what they are looking for before you make the application for a loan. Once we submit a loan, it includes two processes.
- 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.
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. With the help of specialty lenders, now you can also apply for for home loans with unpaid defaults.
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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 those are unpaid.
- Any associated companies or business activities.
- Any bankrupts on financial or court actions.