If you are someone who is in need of some type of loan, you have to understand a few terms before you jump into this world of loans. Whether you want to build a new house for your family, or purchase a new car to commute to your office, you will have to go through a long process of proving your creditworthiness before you can get the loan you desire. That’s where credit investigation comes in. You might not like this term or the process, but it is imperative for a financial institution before forwarding a loan. Just keep in mind that you are not the only person who is going through this type of scrutiny.
Why the Need of Credit Investigation
You have to realize that the financial institution that is agreeing you to get a loan is putting its money at risk. You are only thinking about yourself but the financial institution you are getting the loan from meets hundreds of customers like you on a daily basis. You know your integrity and faith, but the lender does not know that. Not to mention, the lender is doing business and it has to have everything confirmed and verified before it forwards even a single dollar as a loan to anyone. That’s why there is credit investigation that will be conducted by the lender if you approach one for a loan.
It is important to realize here that the lender or financial institution that’s doing the investigation has nothing against you. Many people think that they are being investigated unfairly, but that’s not true at all. If you were to give someone your money, you would want to know their creditworthiness as well. That’s the same thing the lender is doing. To do the business of money, the creditor or lender has to secure every single penny that it forwards to someone as a loan. You have to know that a financial institution that does not ask about your credit could be a potential finance scam.
Your Role as a Customer
If you are the one being investigated, you have to play your role with responsibility. Yes, you might not realize it but you are the key player in this entire process. You are being investigated because the lender wants to know that the amount of money you are borrowing is only big or small enough that you will be able to pay it off in the future. So, they will have to know a lot of details about your expenses and income. Your responsibility as a customer is to provide all the pieces of information as accurately as possible. The more accurate you are with your information, the easier and smoother the process will be.
Keep in mind that you cannot deceive the system. If you start lying about your financial condition, you are going to go nowhere. In fact, you might close the doors of getting any loan from any lender at all because the lender you deceive will spread information about you and inform other lenders as well. Therefore, you have to make sure that every piece of information you provide to the creditor is accurate to the best of your knowledge.
What You Have to be Prepared For
Of course, when you know the purpose of credit investigation, you will know the type of questions you have to be prepared for. First of all, you will have to tell the potential creditor about your income. Tell the credit about every mode of income that you have in place. If you work online in addition to doing a day time job, you have to inform the lender/creditor about it. Do not hide any information about your income because that’s going to go against you. In fact, the more income you have the higher the chances are of you getting the loan successfully.
That’s why, there is no reason to hide your income sources and the amount of money you make every month. Some people think that they should hide their income sources so their payments to repay the loan can be smaller. What they don’t realize is that with one source of income, their chances of getting the loan become thin as well. However, if your lender does not want to know your creditworthiness, you can be sure that it is nothing more than a finance scam.
In addition to the income-related questions, you also have to be prepared to answer some questions about your expenses. Any question about your income is useless unless the potential lender knows about your expenses. It does not matter how much money you make every month. What matters the most is how much of it you end up spending every month. The more your expenses are the lower your chances are of getting the desired loan. When you have too many expenses, the creditor thinks that you will not be able to pay back the loan because you are not left with enough money to make your monthly installment.
A finance scam tries to make things appear easier than they are. These scams make you think that getting a loan is easy, when it is not. They lure you into their trap by telling you that there will be no credit investigation, but that’s where you make a huge mistake. If a lender is not interested in your financial status at the time of getting the loan, it is nothing more than a finance scam. It will give you the money and take back more than double of that amount. You will not be able to even go to the court to get help because such a scam will make you sign documents, which will take away your right to go to the court to report the scam.
So, make sure that you take credit investigation seriously. If you find a company that does not want to investigate your credit status before giving you the loan, you should run away from it as far away as possible.