Credit is one of the many methods of payment offered by banks or other finance bureaus. In fact, banking and credit have been regulated in Republic of Indonesia Law Number 10 of 1998. It is stated in the Law that the Bank becomes a business entity that collects funds obtained from the community and distributes it to the community. In this case, the community that is the customer is called the debtor or the target of lending funds.
Although the community is the main target, not all of their application proposals are approved by the bank. The bank will analyze the feasibility of a prospective credit recipient with the criteria that have been determined. So, don’t be surprised if some customers receive their submissions while others experience rejection. For those who don’t know what the scoring system is, of course they wonder why why my credit is not approved.
All you need to know, there are many factors that determine credit approval before the issuance of an agreement. The bank has a standard method and format that must be fulfilled by prospective debtors. It is written in the format, shape and depth of consideration determined by the bank. You could say this kind of assessment and analysis is the key to whether or not your credit is accepted. For those of you who plan to apply for credit to the bank, know some things that affect credit approval as explained below.
Credit Card Ownership
For ease of transactions, credit cards are created. Did you know if a credit card also affects the credit approval that you submit? This relates to whether you have a credit card or not. If you have a credit card, this will be a plus point in their assessment. If you don’t have it, that means you won’t have a credit score.
Credit cards are one of the easiest types of credit accounts to obtain. This card will give a good reputation to the owner by displaying a good credit history. If you use your credit card well, it will reflect a good track record so that your credit score will also be high. In addition, having a good track record on several types of credit accounts will also boost your credit score.
Character that matches the Bank Criteria
Prospective debtors or customers come from various backgrounds and characters. In this case, the bank will assess the character or character of the prospective customer before they give approval for the proposed credit. To find out the character of the customer, the bank sends its representative to collect information obtained from the customer’s references and other banks related to honesty, behavior, association and compliance with prospective debtors in making payment transactions. Another way is by checking the customer’s credit history at Bank Indonesia. Investigating the character of the prospective customer is important because it relates to good faith in paying for its obligations.
Payment Capacity or Ability
The bank will only give credit to people who are able to pay it off. Therefore they will see and analyze the ability of credit applicants. What they will value is the component of income of a prospective debtor whether it meets the criteria or not. A credit analyst must be able to ensure that credit applicants have adequate sources of income to fulfill credit payment obligations based on the agreed period of time.
Amount of Capital Owned
Prospective debtors who need a loan must have assets. Why is that? One that is also analyzed by banks is how much capital is owned by credit applicants. To find out the amount of capital or assets owned by credit applicants, the bank will look at the balance sheet of the credit applicant company. You can also see the survey results on the wealth of prospective debtors individually. Basically, banks will not provide loans to applicants who do not have their own capital or whose assets are minimum.
Condition of the Prospective Debtor Company
The condition of the company also enters the bank’s assessment in selecting prospective credit customers. The bank will conduct an analysis on this aspect where such analysis includes analysis of macro variables. This analysis includes national and international regional variables. The variables that will be of particular concern in their assessment are economic variables. Because, this will greatly determine how smoothly the prospective debtor pays credit.
The bank will not immediately provide loans without collateral. Collateral is the last solution to overcome the risk of lending if the customer does not pay. Therefore, the guarantee value is definitely greater than the guarantee value. The bank will only provide loans at a maximum of 75% of the credit guarantee value.
For administrative purposes, the data and information must be included. In applying for credit, a customer must complete the requested document. In principle, the way they propose credit is actually the same. There is no obligation to pay facilitation payments so that the loan approval effort is smooth. The key is that you have to make sure that the guarantee you provide meets the conditions that have been set, such as the minimum age of guarantee and so on.
Sometimes, family data is also an assessed aspect in determining credit approval. This was found in several financial institutions to review the track record of prospective customers in paying off credit.
Tell us about your experience about approving a credit card application! What do you do? You can share this information with the people closest to you who want to apply for a credit card, thank you.