Banks are getting tougher and more stringent when it comes to providing loans and credit to consumers these days. The change that one sees in the financial circles is due to the loss that the firms are incurring due to bad debts. Though banks and financial institutions have been notorious about preferring consumers who cannot always pay the entire credit payments, the fact is that it is from among these consumers that insolvent situation arises.

And that is the reason why banks screen loan or credit applications and the information provided in the credit application or 1003 (term for application in mortgage business). Therefore, it is extremely important to understand the entire process and try so that you can fill up the application in a manner that will ensure your credit.

There are two factors that really determine your chances of getting a car loan, mortgage or even a credit card. These are:

    1. The content of the application and the information you provide about your jobs, house history and more
    2. Your credit history, the credit score and other specific factors that go into determining your score.

A good credit score and a good credit history is obviously a very important factor. However, there are many applicants who get rejected regardless of a good credit history. This is because you can actually have a good credit history that does not result in a good credit score. For example, if you have a few credit cards with maxed credit limits or an open mortgage that you have been servicing for the last few years, you can still have a credit score between 670 and 690. In some cases people with 4 to 6 credit cards and only two or three years in credit report with a score of 720 or higher. It is therefore obvious that a good credit history is a necessary but not sufficient condition for a good credit score. You can learn more about this in another article on our website.

The other aspect that can determine the fate of your credit application is the form itself. For simplicity, let's talk about auto loan and credit cards applications in particular. When you sit down to fill the application form, make sure that you have your driver's license and your current pay stub handy. You will need this information to fill up the form. Let's take each of the various heads that you are likely to see in the form and understand how you should handle it.

1. Name - Ensure that the name that you write in the application form exactly as it appears in your license. Make sure that you mention the specific 'Sr., Jr., I, II or III' that is attached to your name. Follow the guidelines when it comes to the order in which the first, middle and last name have been asked for. Put each in the correct order and place.

    2. Address - Obviously, you need to enter your current residential address. However, if you have not been staying in your current residence for the past two years or more then provide your previous address. All the information that you provide must be exact - the zip codes, apartment number street number and other information. If you live with a roommate, you need to be careful since you are likely to be visited by a loan officer asking for some proof of residence (VOR) under your name. This is almost always asked for in the case of a home mortgage application.

    3. County - Make sure that you understand whether you are being asked for your country of birth or county of current residence before filling up the details.

    4. Home Phone - These days with higher usage of cell phones, many people tend to strike this heading off and provide their cell phone numbers instead of home phone numbers. The problem, however, is that when a loan officer verify the information provided, they are advised to use the home phone number and not the cell number. If your application does not have a home phone number then the officer is likely to find out when he tries to check on you based on the calling information that you have provided. Many financial institutions use a 'No phone No loan' policy and therefore you need to be careful about that. If you don't have a home phone number and are trying to apply for a big loan with a credit history or score that is not so great, your application has a high probability of being rejected.

    5. Time at resident - This piece of information is necessary because calling loan officers are likely to use it when calling to verify. This is another piece of information that is almost always required in the case of a home mortgage application.

     6. Previous Address - In many applications the current residence is required to be written in the assigned place. And this information is required if you have not lived in your current residence for the last two years. Some banks need to you to provide your residential information for the past five years. Make sure that all the residence addresses are mentioned properly with zip codes and correct street and apartment numbers in each case.

7. Education - For applicant younger than the age of twenty eight, a good educational background is the key when it comes to applying for a car loan. The information is critical to assess earning and payback potential. Having a four year college degree will help. In some cases you may be entitled to receive a factory cash rebate on a new car. But make sure that all the information that you provide is factual and verifiable.

    8. Employer - While providing this information, you may need to give the employer's address, phone number and the specific person with whom verification can be made. If the company you are working is a large one and you have a human resources department, the name of a resource in this department may be a good idea. But make sure that the person whose name you are putting on your application is aware of your legal name. It might help to tell him in advance that you have put his name in the application and that he may be called in for verification.

If you work in a smaller company that does not have a human resources department, you can put in your supervisor's or immediate superior's name. Make sure that you do not put your friend's name as a supervisor to cover some information that you have included in the application. Do not underestimate the loan officers. They will definitely dig deeper than you think and unearth the truth.

You may be required to disclose your previous job if the current one is a job that you have had for less than two years. As in the residential case, some banks require you to provide information of all the employers you have had in the past five years. In all cases, ensure that you provide correct and verifiable information. Putting down the address, phone number, supervisor name, time and type of job and income for all your previous jobs may seem a bit tedious but remember that your loan application depends on the verified results of the same.

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