With every financing, your creditworthiness is assessed by the individual banks using defined criteria. There are very different approaches and calculations here from bank to bank. We will explain the criteria, calculations and evaluations of the banks for credit, loans and mortgage lending, the creditworthiness criteria, as part of our free consultation.
Credit rating level from the previous reports
The Credit Bureau Score shows a credit rating level from the previous reports in the Credit Bureau information. The better this value, the higher the likelihood that the customer will meet his installment obligations properly. The individual calculation factors and weightings are not publicly known. The banks set a certain Credit Bureau minimum value as a prerequisite for lending, which varies from institution to institution.
The bank calculates whether a repayment of the loan
The household bill compares a customer’s personal income with their expenses. In this way, the bank calculates whether a repayment of the loan is purely mathematically possible. It should not be the case that a loan is granted that can be seen at the beginning that the repayment will be problematic. Depending on the marital status and the number of persons required to maintain the customer, household lump sums are set for living expenses, which also vary from institute to institute. Look like the calculation for a single borrower living with their parents:
With an income of $ 1,400 net there is still $ 250 for possible further credit installments.
Maximum limit for in-house financing
Each bank sets a maximum limit for in-house financing and a limit for the overall obligations of a customer. Here, too, there are different limits depending on the bank.
Credit-related conditions exist at some banks that want to compensate for an arithmetically higher risk by higher interest rates.
Your personal data also result in a credit score in order to be able to statistically calculate the respective risk factors. A long period of employment is rated better than a constant change of employer. The attachable portion of your income can also be assessed depending on your marital status. Some banks want the spouse to be co-committed with married customers.