U.I.G. Factors Corp

Credit Resources

Approved or Declined

So you have applied and you get a response. When you apply for any loan, be sure to thoroughly complete the application. Some companies, in addition to reviewing your credit, will assign you an internal application score. You get this score by getting, or losing “points” based on information you listed on your application. If you are asked for a bank reference but didn’t bring that information with you, get that information, then submit your application. Do not submit with missing information. You may very well lose “points” which could be the difference between an approval and a decline.

Let’s say you are well off and you have a Money Market Account, Certificate of Deposit, or even an IRA with a good balance, ask a Loan Officer if providing that information will help the application. Sometimes it will. Basically, companies are trying to see if you have not only the willingness to repay based on your report, but the capacity to repay based on your assets. Capacity is assessed by your cash flow, back up cash and assets. If you can show that you have a large back up, some companies will consider this. Willingness to repay is mostly determined by your credit bureau. Any slow pays may have been out of your control, but they will be taken as is.

Additional Information

Once you have applied, if you are contacted for additional information, supply as much requested as possible. You may not have supplied enough information and your application may be at a standstill until this is provided. Sometimes, your application is “declined as is” but it is a borderline case and the loan officer wants to get something from you to strengthen your application, which may make an approval out of it.

Approved.

You have been approved. If you wanted more than what you got, ask for more. Very often, the amount you received is not the maximum and sometimes, you can get a 10% to 15% increase without another credit review automatically, just by asking!

Individual Guarantee Most Loans require what is often referred to as an individual Guarantor or signer. Sometimes the institution says that you are required to “sign on it”. This means more than you are just signing to acknowledge or agree to the terms. It means that you are legally agreeing to personally guarantee the loan, which gives the institution the right to sue you for payment in the event you cannot pay. This could include their ability to garnish your wages, place liens on your home, etc. What the company can do will vary from contract to contract, but it gives them great power over you. Most of the time you have no choice but to sign, otherwise the loan would not have been approved. You should simply be aware of this and be prepared that severe negative consequences to you are real and can easily take place if you default or are severely delinquent.

Co-Signers

If you are co-signing to “help” someone else get a loan, you are just as responsible for that loan as the person you are helping get the loan for. Many people get derogatory items reporting on their credit report on loans they co-signed on because.

After they co-signed on the loan, they considered themselves to be done with the transaction and they forget about it. They also don’t keep track of how the person they co-signed for is paying on the loan. Most companies don’t send the co-signer notices of when the payments are due or notices that the payments are late. It isn’t until the loan is severely delinquent or in default status that the co-signer is contacted for payment. By then it has negatively affected your credit in a major way and it is too late.

If you co-sign any personal loans or business loans for anyone, make sure you feel they will really repay. Keep track of the loan and have the lender send you notices of payments due and immediately notify you or contact you if the payments are delinquent. Most importantly, be prepared, as you promised with your signature, to pay in the event the primary borrower doesn’t.