How much do personal and work references influence credit evaluation? As you will discover in this article, financial institutions place significant importance on these documents.
You can be sure that any information requested by a financial institution, when you request a loan, is relevant. Simply, a serious institution would never ask you for any documentation that is not relevant, either for your analysis as a potential client, or as a formal requirement.
Importance of personal and work references in credit evaluation
Here is what the personal and work references are used for in the credit evaluation.
Use of personal references
Personal references allow the financial institution to meet and eventually contact people who know you and recommend you. The institution needs to ensure that you are a responsible person, who will comply with the payment obligations that will originate the credit. By establishing contact with those people you left as a reference, they will be able to know the image they have of you, including your degree of responsibility.
Of course, you need to choose a suitable person to be your reference, since not everyone can be a good reference. He prefers that with a profession, that presents economic stability and that is not reported negatively before any credit bureau. Try not to request it for comfort to distant relatives, neighbors or in-laws, make a careful selection of the person whose reference may be favorable to you.
Use of job references
Labor references allow you to establish your financial solvency, and what is your seniority in your current job. This information is vital to determine the income that you can sustain, and with it, establish what is your ability to pay the credit. As a general rule, this capacity is established at a maximum of 30% of the gross income that you receive as salary.
On the other hand, seniority allows you to establish whether your employment relationship is stable and has been maintained over time, or you are just starting out in such work. For financial institutions, it is better how much older you can show, since among other things, that shows that you are responsible in your work.