After the 2008 economic crisis, getting a loan has become more difficult. Creditors only lent money to those with almost perfect credit ratings. First class consumers (with perfect credit scores) were the only ones who could get the financing they needed.
But, over time, other consumers began to pay off all their debts and take care of their finances, so that they became the consumers of almost the first category. These borrowers have a better credit rating than the at-risk borrowers, but at the same time, it is not as good as that of the first-class borrowers. These people did not have a perfect credit history, but they made the effort to get their finances back on track.
The first category, almost first or same risk category
Banks and other institutions like to categorize consumers by their ability to repay the debt. Before the economic crisis, borrowing restrictions were not widely practiced. After the crisis, however, creditors became very concerned about the consumer’s ability to pay off their debt, especially for the at-risk consumer. All of a sudden, the only ones who could get a loan were first class consumers.
- First class consumer : A consumer who has a credit score greater than 720.
- First-class consumer: There is no exact figure, but their credit score varies between 660 and 720.
- At-risk consumer: This is a consumer whose score is less than 660.
While the effects of the crisis are still being felt, first-class consumers continue to be turned down for loans, lacking funding to buy a house or start a project. The risk of insolvency continues to haunt lenders.
The majority of the financial problems of the consumers of almost the first category concern the past and not nothing to do with their current financial stability.
The good news: things change
In general, first-class consumers continue to be turned down by banks for financial faults in their past that are now beyond their control. Unfortunately, our financial mistakes remain on our credit report for 10 years. ( Learn how to protect your credit report here ), which negatively affects the credit score for the same period. This could prevent you from obtaining the necessary funding. When the creditor takes the time to look beyond the credit score, he often discovers that the consumer of almost first class is a reliable pillar.
The good news is that things are changing. Currently, the average Canadian:
- Has the opportunity to repay a loan on time and in full
- Has a job
- Has an income of $ 50,000 or more
- Has enough money in your bank account
Fortunately, creditors have begun to analyze other data to assess the reliability and solvency of the borrower.
- Telephone bills
- The bills of the charges (water, gas, electricity)
- Your bank statements
- Your rental history
If creditors are more likely to offer first-class consumers, they will have the chance to improve their credit rating and access more financing in the future.
Will I be approved?
If you are a consumer of almost the first category, it is difficult to know if you will be approved or refused. The lending market has changed dramatically since 2008 and it continues to change today. But more and more consumers are getting the desired financing, so do not lose hope.
Some financial institutions have already realized the opportunities available to them if they start to finance consumers of almost the first category. Know how to seize this opportunity.