Learn how credit analysis is done for personal loans

When you apply for a personal loan, the expectation of approval is quite high, but do you know how the credit analysis for a personal loan is done?

For the financial institution to reach a decision on whether or not to release your personal loan, there is a very important step: the credit analysis.

And it is based on this credit analysis that the financial institution will determine whether or not your personal loan will be released.

And in case of release, define the interest rates and number of installments for payment.

Therefore, the main objective of credit analysis for loans is to ensure that the institution will receive the released money back.

And another important point is that the financial institution knows about the debts you already have, if you have any, of course, so they will know if you will actually be able to pay the loan installments.

But to make this all clearer and help you understand the entire process and even how to improve your chances of getting your personal loan, continue reading and get your questions answered.

What is credit analysis?

As we mentioned, credit analysis for personal loans is a process carried out by financial institutions to ensure they receive the full amount back.

This process is done precisely to offer security to the financial institutions that will be providing the personal loan.

But this credit analysis procedure is not only used for loans, but also for credit cards, financing and also for an overdraft limit.

Even when opening a bank account, your information is evaluated by the financial institution.

How is the credit analysis for a personal loan done?

This process may vary depending on the financial institution you choose to apply for your personal loan.

However, there are some basic points that all financial institutions usually evaluate.

Therefore, financial institutions generally analyze the following information when analyzing credit for personal loans:

Your personal data for credit analysis for personal loans

The first thing the financial institution does is analyze the veracity of your personal data through your documents.

That is, ID, CPF, address, telephone number, marital status, education, profession and income.

Once you have all this information, the financial institution will begin its credit analysis.

Restrictions on your name hinder credit analysis

Once the financial institution has your data, the next step is to find out if you have any outstanding debts or restrictions with them.

If so, you will have a high chance of having your loan denied, as the chance of default is much higher.

In this case, you could request your loan from another financial institution, but be aware that these inquiries are not only made internally.

Therefore, most financial institutions use Credit Bureaus to perform credit analysis for personal loans.

Credit Bureaus are companies authorized by the Central Bank that manage and provide information related to people's payment histories.

In other words, your entire financial history is recorded and used by credit bureaus, which in turn process the information and make it available to financial institutions that offer credit services, such as loans, for example.

And it is the bureaus that also provide information such as your consumer credit score, which can range from 0 to 1000.

The score calculation is based on your debt and payment history.

There are 4 main companies that calculate and provide this data: Serasa, Boa Vista SCPC, Quod and SPC.

The main purpose of this consultation is to assess your risk of default when applying for a loan.

Therefore, the better payer you are and the higher your score, the more chances you have of having your loan approved.

Positive registration can facilitate the release of your personal loan

The positive registry is another database that gathers and provides information through bureaus.

This data is the opposite of the defaulters database, that is, it is basically a “list” of good payers.

It is through this registration that companies can access their payments made on time.

Therefore, when they see that you are a good payer, that you do not pay late and that you meet your financial commitments, in addition to being more easily approved, the financial institution also offers you better payment options.  

Proof of income is important when analyzing credit

Another important step for financial institutions that is analyzed when you apply for a personal loan is your monthly income.

And this information is extremely important because it serves as one of the guarantees that you will have enough money to pay the installments over time.

Normally, the loan amount requested cannot exceed 30% of your salary, so that your income is not compromised.

Secured Loan

This assessment is only made when the requested loan modality is a secured loan.

In other words, as the name suggests, you will need to have something as a guarantee in case you are unable to fulfill your commitment to the financial institution.

This collateral is usually a car or property, and with this type of loan you usually request higher amounts.

Therefore, an inspection of the property is carried out as a guarantee, in addition to it being in your name and paid off, among other requirements that are specified by the financial institution.

So, now that you know everything financial institutions consider when conducting a credit analysis for a personal loan, we'll give you some tips on how to improve your credit profile.

Continue reading and see the tips we have prepared for you!

How can I improve my credit analysis profile for a personal loan?

One of the main things you can do to increase your chances of getting a personal loan is to increase your score, that is, your good payer rating.

People with low credit scores have more difficulty getting a loan approved.

However, if you have a low score and are having difficulty obtaining credit for a personal loan, there are some practices that can help you increase your score.

They are:

Keep your name clean to get a better credit analysis for loans

This is one of the main tips, keeping your name clean is not always an easy task.

But it is actually ideal to keep your name away from the bureaus' restricted registration list, as this is exactly what causes your score to "plummet".

However, if you are already in this situation, don't think there is no solution.

Ideally, you should look for the company or companies you owe money to and renegotiate the debt, so your name will be removed from the restriction list.

Several companies offer negotiation options, so be sure to keep your accounts up to date to ensure approval for a personal loan is easier.

Pay your bills on time or pay early to increase your loan credit.

Always have a spreadsheet or reminder with the due dates for your bills, such as electricity, water, internet, and telephone, for example.

Making payments on fixed and essential bills on time, or even paying them early if possible, is a great way to show that you're meeting your financial commitments.

And it's one of the things that will really help you increase your score.

Use direct debit

It may seem like a simple tip, but if you're the type of person who misses bill payments, setting up automatic debit ensures they're paid on time.

And paying bills on time helps increase your score and consequently your credit analysis for a personal loan.

Sites like Serasa for example, they allow you to check your socore and know what your score is.

Be part of the financial market

This means, open a line of credit in your name, nowadays there are several digital banks that make it easier to get a credit card, such as Nubank , C6 Bank , between others.

And even putting basic invoices in your name also shows that you actively participate in the financial market.

But when using a credit card, always be mindful of its responsible use, always staying below your limit and keeping your bills up to date.

When you make too many requests for a credit limit increase, it can appear that you're strapped for cash, making it harder to improve your score.

Therefore, try to use your credit card as an ally in your favor to increase your score and have an easier time getting approved when analyzing credit for a personal loan.

Keeping your data up to date speeds up credit analysis for personal loans.

Keeping data up to date is important for any industry, and it's no different for financial institutions.

In other words, if you have changed your address, changed your job, or even changed your phone number, it is important to update it.

Avoid making credit analysis inquiries

Making credit inquiries at different companies using your CPF may indicate financial instability.

Because each time a query is made, it is recorded in the databases for a certain period and your score may decrease.

So, be sure to take advantage of our tips on how to improve your chances of getting a personal loan!

And also check which documents are required to apply for your personal loan, Click here and find out.