Canadian lenders use credit reports when providing the best BC Mortgage Rates.
When a person applies for a car loan, home mortgage, student loan, or any other kind of loan, a lender checks the credit report for the applicant’s credit score or credit reputation. A credit score summarises an applicant’s reliability in paying a credit, as shown by his or her credit history. A lender should use credit reports to validate information disclosed on the loan application, especially the number of creditors and amount of outstanding debt. The lender should particularly investigate the last two years of the applicant’s credit history. If the comparison shows significant discrepancies, major omissions, or erroneous information, then the lender should hold processing the loan application pending a written explanation from the applicant.
There are, occasionally, discrepancies in the information an applicant provides and the information on the credit report. While being alert on these discrepancies, the lender should not automatically rule out the applicant’s qualification for a loan. The discrepancies may be due to a number of reasons: The applicant may not remember all details of his or her credit history, or the credit reporting bureau, on the other hand, may have entered incorrect information. If and when this happens, then the lender should advise the applicant to discuss the information with the credit bureau directly. Where the applicant suspects an incorrect information entered into his or her credit bureau report, he can simply inform the credit bureau and follow the process for making the correction. With a better credit score, the applicant may then proceed with the application.
Additionally, some creditors do not report regularly or do not report at all to national credit bureaus , so the applicant’s credit information is outdated. Thus, the lender should complete verification by mailing a Verification of Loan form to the creditor or by requesting the applicant to provide a loan statement. The lender should verify all information in a credit report.