Re: Personal Loan through NFCU[ Edited ]
12-02-2012 12:51 PM - edited 12-02-2012 12:53 PM
As with any credit app, the lendor determines the qualification criteria.
FICO does not evaluate overall ability to pay, as it does not take into account the obvious and pertinent factors such as income, assets, and debt to income.
FICO tells the prospective creditor, regardless of income and assets, the risk of your timely repayment. You may, for example, have substantial income, but just dont pay on time.
For relatively low principal credit, the creditor may choose to rely only on risk of repayment analysis, as a pull of FICO score is quick and cheap.
However, as their risk increases, such as due to higher principal on an installment loan, or higher CL on a revolving account, they will most likely do a manual review of the consumer's credit report, along with inquiry about other non-FICO factors. Mortgage loans rarely rely only on a FICO score, while many starter cards may base their decision only on FICO score, thus permitting consumers to use AU status to gain qualification without the creditor's concern that your score is not based only on your own credit history.
Two consumers with identical FICO scores, both apping for a loan of, for example, $10K, will be viewed differently depending upon the type of review and criteria used by the lendor.
Does NFCU do more extensive reviews for personal loans at that level? I dunno.....
If they do, and the requested loan principal is 40% of monthly income, I would suspect greater scrutiny, with possibly a request for some security on the loan.