Dec 03, 2012 Walt Wojciechowski
Loan underwriters can be seen as a kind of guardian throughout the loan process. These professionals evaluate the means of the individual compared to credit worthiness and the likelihood of repayment. The amount of credit needed may vary according the cost of the desired loan. These individuals play a significant role to lenders negotiating with various financial entities may provide a sense of confidence for the lender. If better methods of data collection are available to underwriters, more sound financial decisions can be made. Increased lending opportunities and a fuller profile of the borrower may be established in some cases by using alternative credit scores. Alternative credit scores
Traditional means of tracking and scoring credit have been controlled by the big three credit rating industries: Experian, TransUnion and Equifax. These reports track unpaid balances, debts, available and used lines for credit, bankruptcy findings and other negative financial information. Some consumers may lack a high rating because of these methods, but alternative credit scores may increase loan options should data such as public utility payments, prepaid credit cards and monthly rental receipts be employed. Responsible underwriting practices should be instilled for all lenders to ensure that investments are returned with growth. Lender confidence is important to the growth of the industry, and with increased attention to best underwriting practices, more well considered decisions can be made when it comes to loan approvals. It is of increased significance that small short term lenders instill sound practices that are informed by both profitability and federal and state regulations.