Loan Application Scoring System
Each bank has a credit scoring system that determines the acceptability of the borrower. This scoring system takes into account your income, length of employment and residence, etc. 21121m125v
The five major factors that all lenders give high importance to are:
1. A salary of at least $1,500 per month
2. At least 5 years at present address
3. Employed at present job for at least two years
4. A "paying on time" credit history
5. A telephone in your name
(This is a sample of the system of a major bank.)
Factors_________ Score__________
1. Years at job:
a. Less than one year 0
b. One or two years 1
c. Two to four years 2
d. Four to ten years 3
e. Over ten years 4
2. Monthly income level
a. Less than $1,000 0
b. $1,000 to 1,500 1
c. $1,500 to 2,000 2
d. Over $2,000 3
3. Present obligations past due
a. Yes 0
b. No 2
4. Total monthly payments to income
after taxes comparison
a. 50% 0
b. 40 to 49% 1
c. 30 to 39% 2
d. Under 30% 3
5. Prior loans at any branch bank
a. No 0
b. Yes, but not closed 0
c. Yes, but closed with two or less
eleven-day notices per year 2
6. Checking account at this bank
a. None 0
b. Yes, with over five rejected items
over the past year 1
c. Yes, with no rejected items
In the past year 2
7. Length at present or previous address
a. Less than three years 0
b. Three years or more 1
8. Age of newest automobile
a. Over one year old 0
b. Less than one year old 1
9. Savings account
a. No 0
b. Yes 1
10. Own real estate
a. No 0
b. Yes 3
11. Telephone in own name
a. No 0
b. Yes 1
12. Credit references
a. No 0
b. Yes 1
When you apply for credit, your application is scored and the evaluated on the basis of criteria given by the bank's Credit Policy Committee. These criteria vary from bank to bank.
Below we have listed the scoring system.
90-100% of possible points
Loan Granted
75-89% of possible points
Loan granted unless negative items on credit report
50-74% of possible points
Risk
40-49% of possible points
Review with possible rejection
0-39% of possible points
Automatic rejection
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