Scoring is ... Credit Scoring

Probably, today there is no such person who at least once in his life has not used the credit. Sometimes, the bank's employees can make a decision on granting a loan within 15-20 minutes after your application. How do they do it, how can they evaluate the borrower in such a short time? They do not do this themselves - the decision is made by an impartial computer program - a scoring system. It is she, based on the data entered, assesses the level of the client's trustworthiness.

What a strange word

This not very clear name comes from the English word score, which means "account". Scoring is a computer program that is a kind of questionnaire that characterizes the borrower. Before making a decision to grant a loan, the bank employee will ask you to answer some questions, and the answers will be entered into the computer, after which the program will evaluate the results, assigning for each item a certain number of points. As a result of the addition of all the estimates, we will obtain a certain general indicator, defined as a scoring-evaluation. The higher this score, the more likely a positive decision to grant a loan. Most often, not one, several types of scoring are used, assessing the client in different directions, or a complex multi-level system is applied.

Types of valuation

The most important and most common of these is Application-scoring, this is a verification method that assesses the client's solvency. If you received insufficient points for this type of evaluation, it will be very difficult to get a loan. Alternatively, you may be offered other credit terms - a higher interest rate or a lower loan amount.

The next stage of the assessment is the determination of the potential borrower's propensity for fraud. It is estimated by the Fraud-scoring system . The criteria used to calculate this parameter are the commercial secret of each bank.

Behavioral scoring is a type of verification that allows to predict the client's solvency in the future. Also, this analysis system allows you to identify some "behavioral" factors: how the client will dispose of the loan, whether it will make payments accurately and on time, choose a credit card limit immediately or use the money in parts and much more.

There is one more, the most unpleasant kind of verification, - Collection-scoring of the borrower, which is very important for the development of activities for working with clients who have overdue debts. It is needed to adequately assess the risk of loan default and timely application of preventive measures.

Is it possible to "deceive"?

Since the credit scoring is carried out by the machine, it may seem that it is not difficult to deceive the system - it is enough just to give the "right" answers from the bank's point of view. However, this is not the case, such an attempt can be successful only if the program is built in such a way that it will not be possible to verify some data about you at once. If, however, scoring requires the submission of only information that has been documented, then it is almost impossible to deceive the system. It is not difficult to verify that the data in the questionnaire corresponds to the real state of affairs for security officers, because in the overwhelming majority they are former employees of the Ministry of Internal Affairs, FSB and other similar departments and willingly use "old ties". In addition, sometimes it is quite simple to make a call to work or the neighbors of a future client.

So try not to cheat the program after all, because it originally laid all the known schemes and signs of fraud and if such an attempt is revealed, then the loan in this bank will not be given to you ever.

So, let's look at the advantages that a potential borrower should have if he wants to take out a loan without problems.

Personal data - who will be lucky

1. Sex - it is believed that women are more responsible for fulfilling their financial obligations.
2. Age - here excessive youth or maturity can play with you a cruel joke. Preferred is the age of 25-45 years. Customers falling within this range can count on additional points for this item.
3. Education - if you have a higher education, the bank will trust you more. Such customers are considered more successful, responsible and stable in terms of financial performance.
4. Family ties - single people are not a priority, so if you can "boast" at least a civil marriage, get an extra score.
5. Dependents - of course, having children can not become an obstacle to getting a loan, however, the more of them, the lower the score on this item you will get.

Financial sphere - which professions are preferable

In this part of the questionnaire, the program will assess your progress in the workplace - general and work experience, the prestige of the profession, the level of wages in recent years, the availability of additional sources of income, and more. Ideal option in this case is the presence of only one record in the workbook - the more often you changed the place of work, the less delayed at each enterprise, the less points the system will charge you.

Strangely enough, but banks dislike directors of companies, financial managers, and citizens who provide their employment independently (notaries, lawyers, private detectives, individual entrepreneurs, etc.), because their income is not fixed, but depends on Market trends. Preference is given to customers working for hire - civil servants, specialists, workers, and middle managers - their income is considered more stable.

Solvency Balance Sheet

Scoring-an estimation of a parity of expenses and the income, presence of the outstanding credits taken earlier is also spent. So do not artificially overstate your income, especially if the loan amount you want to receive is very small. Agree, a person who claims monthly income of 100 thousand rubles, who is applying for a loan of 10-15 thousand, looks rather suspicious.

What else does the scoring program want to know?

Of course, the list of questions assessed by the system in different banks may be quite different, but for sure in each of them you will be asked about additional sources of loan security. The bank staff will be interested in whether you have additional sources of financial resources, whether you are the owner of a dacha, a garage, a land plot, a car (if yes, which one). Also, the bank will certainly ask why you need money, whether you applied for a loan earlier, how well you fulfilled your obligations to the organizations that previously issued loans to you. Points are also awarded for each of these criteria.

Criteria for sifting

1. Face control . Although scoring is an automatic computer program, but the data is made by the person, so even in this case it is not possible to completely exclude the "human factor". Therefore, when preparing for an interview, try to dress more positively.
2. Purpose of lending. If you make out a loan as a natural person, then an ideal reason for this may be repairs, buying a holiday home, rest, buying a property or a car. If you tell the bank staff that you are taking money to start a business, then most likely you will get a refusal - the criteria for evaluating legal entities are completely different.
3. Credit history. Of course, most often the scoring program does not have direct access to your history, but it can check the availability of data about you in the "black list" compiled by bank employees based on previously made inquiries at the credit history bureau.

When will not give a loan

If over the past 30 days you have tried three times to take out a loan and have been refused, then do not try again. Most likely, you will be denied again. The fact is that such a scheme is embedded in the database of the program. So do not worry, just wait a month and a half, and your chances to pass credit scoring will increase many times.

Another important factor is the client's credit load. The program will calculate the total number of your loan payments and decide whether you "pull" one more.

It happens that banks organize a whole scoring network, so you should not apply several applications for a loan at once. If their number exceeds 3-4, then, most likely, you will receive a refusal at once in all banks.

Pros and Cons of AutoCheck

Despite the fact that the scoring program is quite high-tech, it still has some disadvantages:

• Banks use a sufficiently high scale for calculations, which is simply unattainable in many respects to the average borrower;
• The client's specific data are not taken into account at all, for example, a Khrushchev in the center of the capital can be regarded as a suitable real estate, but a mansion on the riverbank somewhere in the Irkutsk region will be designated by the system as a "house in the village";
• In small banks that do not have sufficient funding to purchase expensive scoring systems, the verification is conducted fairly superficially;
• The normal existence of a scoring system assumes the existence of an accompanying infrastructure (a bureau of credit histories, etc.).

However, some shortcomings can not cross out the positive aspects from using this kind of evaluation:

• The system provides the most impartial assessment, the impact of personal impressions of employees is minimized;
• Financial institutions that use the scoring system offer their customers a more advantageous interest, since the risk of non-return is minimized;
• Scoring allows the bank to reduce the number of personnel involved in the processing of applications;
• The decision time is reduced to 15-20 minutes;
• If a negative decision is taken, the client will be given a list of factors that have affected the receipt of a low scoring score - this will allow correcting the mistakes made during subsequent appeals.

In conclusion, it should be said that such a rating system is quite new for Russia. And not every bank uses it. So if you clearly realize your shortcomings and decided to get a loan without scoring, then it's quite realistic to do it, you just need to find your "own" bank.