Today like never before computers are "taking over," and they are now doing the job that once was done by credit analysts.
TRW developed the computerized credit screening system used most often.
You should note that you'll be asked for the following screened information on almost every credit application you fill out: PERSONAL INFORMATION Your name Home address (if 2 years or less, your previous address too) Your home telephone number Your date of birth Your Social Security number Name of your nearest relative Your total number of dependents EMPLOYMENT INFORMATION Your position and income Name of your employer Address of your employer Source of any other income PERSONAL ASSET INFORMATION Your home ownership or rental Your mortgage and monthly payment amount Your number of years at this address Make, model, and year of your automobile BANKING INFORMATION Name of your bank or banks and all account numbers Number of years doing business with all banks Number of years doing business with your bank Your credit sources Your IRA information The computer that screens your credit application is programmed to look for certain "positive" indicators, such as home ownership, savings accounts, stability on the job, and of course your income-to-debt ratio.
On the other hand, "negative" indicators are also screened by the computer, such as "job hopping," excessive number of credit cards, no savings, too many dependents, and too much debt for too little income.
But there are some things you can do to increase your potential for a more positive computer screening.
These are listed as follows: 1.
Whenever you want to borrow money, you need to be aware that the purpose for the loan is always screened.
Such purposes as education, medical bills, debt consolidation, or home improvement are always rated more positively than giving your purpose as "vacation" or "stock market investment.
" 2.
It is better for a self-employed individual to show him-or herself as the president of a corporation.
the corporation should have its own separate telephone number.
If you work for a corporation, your job or position title itself can also affect your screening.
In other words, it is better to be an account executive than a sales representative.
Administrative assistants are rated higher than secretaries, and so on.
You can also be screened more favorable, if you have changed jobs often, just by providing an explanation on a separate piece of paper.
3.
You definitely want to be sure that the total debt you will have after acquiring the loan does not increase your debt payment to gross annual income ratio by more than 25 percent-unless the loan is a real estate mortgage, and then your ratio should not increase by more than 39%.
4.
You may not want to include any unrecorded short-term debt of less than six months on your loan or credit application.
But if you have recorded short-term debt, you may want to borrow enough from a friend or relative (and make payments to that person) in order to pay off the recorded debt and thereby reduce your debt-to-income ratio to less than 25 percent.
5.
You should also list any income from your spouse, even if the application does not require it or you are not expecting your spouse to co-sign for the loan.
6.
Any other family members' income should also be shown if they also help to pay household expenses.
7.
You might also cancel any credit cards you aren't presently using, at least temporarily.
8.
Open a savings account at the same bank where you have your checking (and make sure you do have a checking account).
Just having such accounts is always screened as being positive.
9.
A final consideration is typing rather than hand printing your information on the application form, because that all by itself is also screened as a positive indicator of your credit worthiness.