4 C’s of Credit: Character

One of the most overlooked aspects in obtaining credit approval is the section of the credit application4 C's of Credit that deals with character.

Character is vital in the review of an applicant. The lender needs to be comfortable with who they are loaning their money to. Reviewing a credit application with the following key points in mind will go a long way toward getting a loan application approved.

  • A completely filled out application gives the lender a good indication of the applicant’s stability.
  • Make sure the applicant has a valid driver’s license, included on the application. This may sound basic to the loan process, but many times it is overlooked. A driver’s license helps a lender locate an applicant should issues arise.
  • Always look for five years of residency.
  • Is your applicant a home owner or a tenant paying rent? In the case of renters, what is the rental amount and to whom is it paid every month? A landlord name and phone number should be provided for verification.
  • Regarding employment, the standard is five years. If the applicant is new to the job market; e.g. a new graduate, “student” should be listed as the previous occupation, including school attended and for how many years. If the customer changed jobs, but not job fields, a similar job description for each period of employment should be listed. Try to determine why they changed one job for the same work somewhere else. Account for any gaps in employment
  • Finally, references are very important. The applicant should provide the correct number of personal references. Look for the lenders preference for family or non-family references, or a combination of both. Use local references and make sure addresses and phone numbers are accurate.

The best time to ask your customer questions regarding their application is when they are right in front of you buying a car. Take a few extra minutes to help them produce a complete application. Remember, the more information you provide, the better the chance of getting an approval.