Credit Investigation is an essential part of a payday loan application. When a borrower files for an application of low income loan to a bank or other financial institution, a proper credit investigation is being conducted to ensure that risk is minimized. Credit investigations done by a lender or a third-party organization proves to help identify the capacity of borrower to pay back the money and ensure that risk is mitigated.
There are certain ways to provide a credit investigation against a borrower. A credit investigation contains two areas which are referred to as “Direct Credit Investigation” and “Indirect Credit Investigation”.
Direct Credit Investigation is a form of credit investigation where the lender usually gets the information them from the borrower or any institution that is directly connected with the borrower which may have been referred to as reference. Direct credit investigation is often relied to by supporting documents which validate the information supplied by the borrower and institutions referred by the borrower. Direct credit investigation is generally helpful for clients who have already built their credit standing. Most often, if the borrower has a good credit standing, information gathered from a direct credit investigation will be sufficient.
Indirect Credit Investigation on the other hand is information that is gathered by the lender from conducting interviews and requesting information which a borrower has not referred these institutions. The information that can be gathered from this type of investigation provides more bearing as the probability of the information being sugar coated is minimal. In addition, it may prove to get information from this type of investigation more difficult than a direct approach. Often, other institutions will most likely turn down a request for information without prior notice from the client or borrower.
Which type of credit investigation may depend on the lender. There may be cases where a direct credit investigation would be sufficient. Most probably, clients who have good credit standing and are considered low risk clients will be reviewed with a direct approach.
On the other hand, clients who are considered high risk clients and have a history of defaulting payments, will most likely be reviewed with both the direct and indirect approach.
Loans are business entered into by licensed money lenders singapore. Not all lending companies act on good faith and a high degree of caution needs to be exercised by a borrower. Now that lending is a big business, lenders often search around for potential clients. Now a middleman often work behind the scenes by looking for and gathering information from potential clients. The information gathered, once complete, is being used by these middlemen and sold to lenders who buy detailed information about an individual. These middlemen men are referred to as “Loan Aggregators”.
These loan aggregators may often use unconventional (or even unlawful) ways of gathering information. That is why when browsing through online for a potential lender, try to avoid transacting with them online.
Always have that extra step of making a call or visiting the office of the lending company.
Sharing your personal information online can bring you problems later. Here are a few details you may need to keep in mind when using online means in applying for payday loans.
Loan aggregators may use keylogging software that may capture your information even if you do not submit your application. In these cases, make sure you visit a legit website and make sure that you have researched about this specific institution.
Always make sure that you know who you are dealing with. When information is requested, make sure that your connection is secured. If possible, make sure that information is transferred by visiting the lender in person.
Avoid accommodating email requests sent to your inbox requesting for personal information. If needed, try getting in touch with the company by manually typing their email address. Avoid links as this may be a form of phishing information.
Do not click ads that you see on a website. If needed, go to the company’s website and search for the ad manually. Advertisements on sites can be a form of information gathering.
When you already have an ongoing loan and you see charges in your statement that you don’t recognize, raise a dispute immediately. This is important especially with credit card or forms of loan that grant an individual credit.