At the very beginning there is a need to borrow money, then an internal plan, how the newly made commitment will affect the household budget and only at the end where to go for a loan. Before a bank or lending institution grants a loan to a client, he will always check whether he can do it, but what exactly such a check means and why it happens.
Why does the borrower or the borrower come under the microscope?
If the customer turns to a loan company or bank in which he is known, such verification takes place much faster and the way of checking the customer is usually simplified. What does it mean to be known? This is not about publicly known people, but closer knowledge based on previous customer verification. Assuming that the client has already incurred a commitment in a given institution and has a positive credit relationship, it can be said that he has a trust loan in this institution. The case looks worse if the loan previously loaned was not repaid on time. The debtor is checked at the time of submission of the loan application and here, depending on our relationship with the loan company or bank and the credit policy, checking begins. The purpose of checking the borrower is to verify the data contained in the application itself, but also the data on the customer’s credit history at various institutions dealing with the collection of data on debtors. If the loan repayment option once exceeded the customer and there was a delay in repayment of installments, the customer could be entered in the register of debtors, which at the time of submitting the application will disclose such information to the would-be lender. If all the liabilities were serviced without accusations, the customer can count on favor provided that all other criteria, e.g. creditworthiness, are met.
The first element of verification is verification of the customer’s identity and here banks and loan companies use different methods from manual checking ID Card through virtual such as authorization transfers and applications. As soon as the lending institution makes sure who the client is, it starts checking on.
Checking internal databases
The next stage of checks before granting a loan is verification of the internal bases of the loan institution whether the client accidentally has no special offer prepared or, what is worse, is not on the black list. For customer safety reasons and confirmation of the data contained in the application, so-called telephone verification may occur, it should be emphasized that not all institutions use this form of verification . A telephone consultant asks the client questions that verify whether the client actually wants to borrow money and excludes that no one else is impersonating the client.
Verification in debtors’ databases
With written and telephone confirmation, the process of checking the debtors’ database begins. Registers of debtors provide a lot of information about the client about his historical and current obligations. Lenders most often verify the BIK databases. Credit Information Bureau, BIG InfoMonitor, ERIF, KRD, CRIF, KBIG, ZBP Association of Polish Banks, but it may happen that and KIDT where information on telecommunications debts is placed. The information obtained shows whether the customer has had problems with repayment in the past, whether he currently has a commitment, is serviced in a timely manner, and what is the current level of debt. These databases also contain information about unpaid fines or maintenance. To be able to download a report on a consumer, the lender must have his written consent (authorization) to search the databases . Such consent may relate to searching one, two or all databases. Consent to download the report is valid for 60 days. Data collected from registers allow the lender to assess the risk level of granting a loan, not rarely another one. It is also worth mentioning that verification in debtors’ databases also takes place during the repayment of liabilities (monitoring inquiries).
Assuming that the customer receives the green light, the next step may be field verification consisting in checking the facts on site at the customer. This form of verification is most often used by banks when granting corporate loans. An employee of a bank or professional external company, at the request of the bank and with the client’s consent, checks whether the company applying for the loan actually exists by drawing up an audit report. Field verification is also an inspection of the construction site when applying for a mortgage. In this case, the bank checks the level of construction work done before paying out the loan tranche.
As a precautionary measure, you can check yourself that your data is not in the debtors’ registers, because you may not be aware that in the past, for example, you have been issued with a free card for installment loans. Such cards are free for a period of often 12 months, but the following months may already generate fees that reduce the limit granted on it. Therefore, even if you have not used such a card and keep it away from your wallet, it is likely that one year after taking the loan and paying it off due to not paying the card fees, you will receive a negative entry in the BIK every month. This situation will probably prevent you from obtaining funds and the vision of buying a new apartment, car or urgent renovation begins to recede. The customer who wants to borrow money is always burdened with the limited trust of the bank or loan company, and checking itself serves to illustrate the history and current credit options. Building positive relationships with the loan institution can be the key to success, which is why it is so important to pay off all obligations in a timely manner to have a creditworthiness certificate with a red stripe.