Credit Analysis – Learn what it is and how it is done!

Receiving a negative response every time you apply for a credit card or loan isn't easy. But it's crucial to know what it is and how it works. credit analysis in order to understand the reason for the denial.

Below, we'll highlight all the information about this analysis so you don't get frustrated and miss out on getting the credit you so desperately need. Let's go:

Summary of what you will see in this content:

• What is credit analysis? 
• The types of analysis;
• How is a credit analysis done? 
• Who can check my CPF and perform a credit analysis? 
• How to get a credit analysis approved? 
• Conclusion.

What is credit analysis?

This analysis is carried out by the bank that will provide the financial product, and it will be verified whether you are able to return the amount granted.

Therefore, through this process, the bank understands the risks of making the product available to your profile.

In addition to identifying customers who will not be able to honor their obligations in the future, this analysis is used to determine the amount that can be made available to a given consumer.

In the case of a loan, the company checks whether the requested amount is adequate, and for a credit card, the limit will be set.

On the other hand, the credit analysis It is important to choose the Total Effective Cost (CET) and the interest charged on financial services.

In addition to the value of a loan depending on the financial institution selected, it is also possible that the analysis may interfere.

For example, the higher the risk of default, the higher the APR and interest rates on the loan.

The types of analysis 

Each institution determines its analysis model, but there are some types that should be understood by all clients:

Cadastral analysis 

First, we have the analysis of customer data that is done by most banks.

Therefore, the registration analysis is carried out in order to determine the credit value, interest rates and repayment term.

Here, the company also defines whether it is necessary to pledge assets as payment security.

For example, a customer with a negative credit history who wants to obtain a loan will be directed to credit secured by furniture or a vehicle.

This is because the more reliable the information provided, the better the conditions of the financial product.

Therefore, companies may request the following data to make the credit analysis cadastral: 

• Client's marital status;
• Age;
• Education;
• Suitability (whether your profile is actually trustworthy);
• Housing (length of residence, as well as whether your home is owned or rented);
• Number of dependents;
• Legal status of documents;
• Income (main and supplementary, if applicable);
• What activity is carried out;
• Time in current job.

Regarding legal documentation, please be aware that you may need to present:

• Taxpayer Identification Card (CPF);

• Identity card (RG);
• Marriage certificate, if married;
• Annex to the income tax return for the declaration of assets, in accordance with Law 8,009/1990 (Law on the Non-Seizability of Family Assets);
• Proof of residence and income;
• Powers of attorney, if applicable;
• Financial Institution Cards (originals);
• Completed and signed registration form.

Financial credit analysis 

For a company to determine whether you are capable of fulfilling your obligations in a given transaction, it must certainly analyze your finances.

This company understands that there is a direct relationship between its income and the default rate.

For example, let's assume that a self-employed professional wants to apply for credit with a monthly installment of R$$700.

To prove income, the client provides their checking account history and the company observes the following scenario:

In previous months, the professional received R$$1 thousand, and in the last month, the income was R$$5 thousand.

All of this inconsistency may cause the company to deny credit because it was possible to note that some factors may jeopardize the future payment of the debt incurred.  

In this sense, the following will be considered:

Next month, the self-employed person's income may return to R$1,040,000 and he or she may not be able to pay the installment.

Therefore, note that in addition to the bank needing to know the amount of your income, it will be necessary to define the probability of continuing to receive it.

And so that the credit analysis financial is done, the bank may need:

• Payment statements;
• Bank statements as the best sources of information about consumer income;
• Income Tax Declaration.

Suitability analysis 

Thirdly, we have the analysis that aims at information related to your suitability with the credit market, which means the following:

Based on your financial history and your behavior in the credit market, are you a trustworthy person to offer a particular financial product?

Therefore, the institution will have companies specialized in credit risk management, such as SPC (Credit Protection Service), Serasa and Boa Vista Serviços (SCPC).

Therefore, the credit analysis of suitability is classified into 4 categories:

When there is no negative information about the user in the credit market, we call it “without restrictions”.

On the other hand, there is the classification of “alerts” when there are negative records in the credit market, but they have already been resolved.

When the analysis is done, it is noted that you already owed a certain company, but paid, this does not prevent the granting of new credits.

The difference is that the analysis will be more thorough on the part of the credit agent.

In contrast, the category of “restrictive” includes customers who have lost credibility in the financial market due to renegotiations, records of delays and also the generation of losses to creditors.

Finally, those who are in the category of “impediments” are prevented from obtaining credit.

As an example, we can mention asset freezes, impediments in the Housing Finance System (SFH), legal prohibitions on granting credit, among others.

Relationship credit analysis

All information obtained through the consumer's relationship history with the creditor and the credit market is important for this analysis.

That is, when this consumer is already known to the institution, it is possible to extract some important data such as, for example, the interest rates applied to credits that were previously acquired, in addition to the punctuality of repayment.

This type of analysis can assist in assessing suitability, as it guarantees a decision whether or not to provide the financial service.

Sensitivity analysis 

Fourthly, we can talk about a very important analysis, in which the macroeconomic situation is monitored.

For those who don't know yet, macroeconomics encompasses relevant economic variables such as inequality, poverty, unemployment, Gross Domestic Product (GDP), exports, imports, globalization, social issues and monetary policy.

This way, it is possible to predict which situations may increase the risk of default.

Asset analysis

As a final example of credit analysis, we can talk about asset analysis, used to verify guarantees that the consumer can link to the contract.

This guarantee may be an asset that ensures payment of the credit.

Therefore, the Central Bank establishes that banks must require guarantees capable of guaranteeing the return on the capital used in the operation.

This is where credit secured by real estate comes in, where it is necessary to present:

• Identification document (RG, CNH);
• Proof of marital status;
• IPTU;
• Updated property registration.

In return, vehicle refinancing requires the following documents:

• Personal documents, such as ID and CPF;
• CRV – Vehicle Registration Certificate (car document issued by DETRAN);
• Single Vehicle Transfer Document (DUT).

How is a credit analysis done? 

In order to make understanding simple, we will consider the following scenario:

Maria has a negative credit history, is retired, and wants to get a loan to renovate her house.

Therefore, Maria starts looking for credit alternatives and decides to do the simulation at Bank X.

Bank X will probably assess Maria's credit history using the data that was initially provided.

Through credit protection agencies, it will be possible to have a basis for the risks involved in providing the financial product.

These bodies provide two pieces of information that are relevant to the credit analysis: whether the profile is negative and what the credit score is.

Given that Maria's credit history is negative, Bank X will resort to safer alternatives such as secured credit or payroll loans.

This also occurs because Maria has a low score, indicating that the chances of defaulting are high.

After checking the history, the bank can make a projection of the conditions of the loan, since she is retired.

If Maria agrees with the interest rates, available amount and APR, she must submit the documents.

Bank X verifies whether Maria is in fact retired and whether the data initially provided is compatible with the documents.

Who can check my CPF and perform a credit analysis? 

Well, checking your CPF can be done legally in the following situations:

• Companies that sell products in installments or where payment is made by check, and it is necessary to know their payment history;
• Banks and financial institutions that want to know the status of your CPF to provide financial products;
• Businesses that see your profile as a potential consumer for a particular product or service;
• Insurance companies that analyze your situation if you want to renew your car or home insurance.

In this sense, if the user is unaware of any of the actions that justify consulting the CPF, this may indicate a risky situation.

Therefore, you must be careful to ensure that no one obtains services without your authorization.

For those who notice a query from a company they have never contacted, it is necessary to request information about the reason for this query.

Through a simple internet search, you can find this company's branch, address, and contact telephone number.

How to get a credit analysis approved? 

Initially, it is important that you clear your name.

One of the first steps in carrying out the analysis would be to consult the credit protection agencies, which will give the bank a negative image of your profile if your name is tarnished.

So, pay off your debts!

Furthermore, avoid late payment of bills.

Even if your bills are a few days late, you will notice your difficulty in fulfilling your commitments and this will harm your score. score.

If possible, pay your bill in advance, especially your credit card bill, as some banks offer benefits such as credit limit reduction or discounts.

To avoid any payment issues, you can also invest in direct debit.

And speaking of bills, remember that they need to be in your name.

When it comes to financial analysis, this is an important strategy because the bank will have more resources to monitor your CPF activity.

Talking about the credit cards, know that you shouldn't have too many.

If it is found that you have several low limits, it is concluded that you have already exceeded the ideal credit limit for your profile.

In fact, a large number of cards causes confusion and a lack of organization leads to default.

As far as the low limit goes, wait for a credit analysis and the increase by the company.

When you request an increase in your limit each month, this may be an indication that you are always in need of money.

It is also important to avoid requesting any financial product from a company where you have previously had debt.

Even though you have cleared your name, the internal registration is active and has a debt history.

Finally, register with the Positive Registry and keep your data updated.

Conclusion

Note that there are several types of credit analysis and each financial institution has its own process.

In this sense, it is essential that you have or create a good financial history and present all the documents to prove your ability to pay off your debts.

Be transparent and know how to compare institutions in the digital environment so that you are finally approved. Good luck!