More than half of the economically active population and legal entities in Philippines use the loan granting services. Now you can get a loan online around the clock, even with a minimum of documents and with a high probability of approval. But if we are talking about applying to the bank, then a situation when they do not give a loan is faced by a much larger percentage of applicants. They have to answer the question: “Why did they refuse me?”
What do lenders pay attention to before making a decision
When applying for a loan, a potential borrower must provide all the necessary information about himself. The list of documents may include not only a passport, but also papers confirming official employment, income for the last 6 months, etc. Many criteria are taken into account:
- Availability of deposits, real estate and vehicles in the property;
- The level of wages, especially conducted through a potential lender;
- Age and social status;
- The nature of employment and work experience in the last place;
- Credit History (CH).
The last item plays the most important role in the decision. Bad credit history almost leaves you without a chance to get a loan.
What is CI and how is it formed?
For any activity on loan processing and even just submitting a request for it, the relevant data is entered into a general database. It also contains detailed information on loans received and paid off. The quality of the payment, punctuality, too, are recorded.
Of course, if the history contains unpaid debts, there are registered delays, this affects the rating. If all loans were paid carefully, it raises the position of the borrower and his reputation. In addition, this information is available to all financial organizations that are engaged in issuing loans.
Do not assume that early repayment helps to improve the picture. Such borrowers fall into the so-called “gray list”, which may not in the most favorable way affect the decision and also become the reason why they did not approve the loan.
Are there any ways to remedy the situation?
Of course, when a bad credit history does not give a loan, it becomes necessary to fix it. This process is not fast. To begin with, you will have to request your CH at the bureau and examine it. Perhaps there just crept into the error, which you just need to point out. This may take about a month.
If the downgrade was deserved, then to improve the situation it is necessary to rehabilitate. It is enough to take and successfully repay a small loan at a bank several times, and if they are constantly denied there, you can always use the services of an MFI. Moreover, microcredit companies are more willing to give personal loans Philippines in comparison with more finicky banking institutions.
It is important to remember that it is not necessary to trust the proposals to correct the credit history quickly for a cash reward. Often, they may be hiding fraudulent schemes or attempts to impose a very expensive loan. It is better to try to apply in several companies, often it gives a positive result.