Away from the traditional ways of lending money, nowadays, lenders have come up with a new way that is relatively simpler in lending money to the borrowers. The system involves checking the credit score of a borrower and the lender determines how much the borrower is worth getting.
The credit rating – is automatically detected and the information about the borrower as well as the guarantor is checked for credibility. This system of connections is easy and very effective in making sure that borrowers get the loans within the minimal time possible.
Credit scoring – this is the major system that the creditors are using to determine the risk that is there if they lend money to you. When you fill the online form on the lending platform, that information is used to give much information about you. The information is analyzed to determine if you are worth the credit.
There are credit reference companies that the creditors refer to in order to gather the required information about you.
Credit Reference agencies – they are organizations that are responsible for collecting consumers’ financial behavior. They have a credit reference file that shows your credit history. Once you fill the online form, lenders will get a permission to check the credit reference file in order to make a decision. The agencies save the following information about you:
- Accounts Information – all the information about the accounts you have such as bank accounts.
- Financial associations – shows information on people you are financially associated to.
- Liked addresses – shows all the places you have lived at.
- Previous searches – identifies whether other organizations have searched your information for 12 months.
- Public records – like judgments by the court, bankruptcies among others.
- Electoral roll – shows your voters registration and the place of registration.
All the above information is held for 5 to 6 years, this makes lending institutions to check your history that you have before giving you money. Sometimes there might be errors on your credit reference file making it hard for you to get an approval of loans. All that you need to do is contact the agency and tell them to rectify the problem for you.
Even when your credit reference is bad, you can still get a loan. There are guarantor loans companies such as www.guarantorlender.com that offer loans to their borrowers even when they have a poor credit score. The aim of these companies is to give borrowers a chance to make sure that you rectify you credit history.
The guarantor loan lenders will check the credit reference file in order to give the loan to you. This system is very effective because once you are unable to pay off the debt, the guarantor will be responsible. Compared to traditional ways of having guarantors avail themselves at a bank or fill forms bearing their signature, this method is very simple.
The new system does not require all that, you will fill the online form both your details and those of your guarantor. Then the lender will cross reference the credit score of your guarantor and determine the loan to offer you. It’s that simple; this guarantor loan lending system is a great advancement and simplifies lending and borrowing.