Credit analysis is an important step for anyone looking to make a loan or carry out a financing of a good. Regardless of variable factors, anyone will go through this phase before having the credit released for a certain purpose.
What is credit analysis?
Credit analysis is a type of consultation that a creditor, investor or company performs to find out if other companies, individuals or commercial entities have the ability to meet their financial obligations or if they have past due debt, ie consult to test the suitability of the proposer on credit or other services that need to be verified risk. ” Credit analysis seeks to identify the appropriate level of default risk associated with the investment offered to a business, company, or individual. ”
For example , to measure a company’s ability to pay debts, banks, bond investors, credit providers, etc. conduct credit analyzes with their own and third-party databases. Financial indices, cash flow analysis, trend analysis and financial projections can also be used.
An analyst can evaluate the ability of a person or company to pay their obligations by analyzing the credit score, financial histories and credit score to calculate the credibility of the applicant. Let’s then understand what this credit analysis is for, what information is important at this stage, and how to get approval.
What is credit analysis for?
We can say that credit analysis covers several aspects within a negotiation of a possible credit release. For you to understand better, we separate some points that base the step of the credit analysis:
1. Identification of risks
The bank only enters into a negotiation when it feels safe. With you, it must be like that too, right? It is the credit analysis that allows the bank to feel the customer, whether it is worth doing this loan or financing.
2. Appropriate credit
Many people sometimes seek the loan to solve certain situations that have better solutions with less interest. What the customer will do with the money also counts at the time of the client’s credit analysis.
3. Ability to pay
The credit granted must be paid, is what the bank expects and seeks to negotiate with people who have this ability to pay. That is why the funder seeks to know even the loans and other debts of the buyer, because this way he can know if the 30% of the income of the person is no longer compromised.
4. Flexibility of interest
In addition to seeing this, the credit analysis also allows for a flexibility in interest rates. Where there is less risk, there is less interest and otherwise it may also be valid. Remember that we are talking about money, loan.
Who can do the credit analysis?
When seeking a personal loan or financing, the requested financial entity can do the credit analysis of the contractor. It is common that it always occurs after gathering the main information of the interested party, such as RG, CPF, Profession and Income.
It is with the basic data and information of the credit system that interconnect the banks that the financial will be able to check more details of the profile of the buyer. Credit analysis is done by the bank itself through an authorized agent, whether it is a new car dealer or a financial clerk.
How is the credit analysis done?
Credit analysis is a common process and it is in it that the bank or the financial analyzes the conditions of the customer’s request, whether the money itself or a good, such as car or property, and the profile of the buyer. Before doing analysis, the entity asks for some personal and professional information to assemble the profile.
It is this customer profile that goes into the so-called credit analysis. Through its system, the bank conducts a general search to confirm information, see credit movements and whether or not the person’s name is on the SPC or Serasa list. For example, when you finance a car, it is common to speak of a score, which is a score where the bank sees, through statistics, the probability of default.
What information is important to do credit analysis?
It is normal for the bank to request personal and professional data. If it were in a list, we could then do the following:
- Clean name (not counting SPC or Serasa list)
Among other documents that can be ordered. It is worth mentioning that this information must be true, since the bank will only release the credit if, after the analysis, the previous information is proven.
How to get approved in the credit analysis?
To get approval in the credit analysis you need to meet some requirements that the bank finds important. It is a fact that there are small differences from one bank to another, but it is a consensus that the person interested in borrowing has a clean name, that does not have many other debts that exceeds 30% of the income, and that has a proven income, whether autonomous, CLT or undertake.
The clearer you are in passing this information, the more chance you have of getting approval at the time of credit review.
Remember, now that you already know “what is credit analysis” improve your score to adjust some variables that can help you at the time of buying the car etc. Details like this make a difference and can help you get the loan or financing.