Being a potential creditor is not an easy job. You need to check for various aspects. The main reason behind this is that when a person becomes a creditor he has to work as a bank. If a buyer is not getting loans from banks and other sources then only they will come in your contact and ask for a loan.
Very first thing that needs your attention is that it is very important to ascertain that why the buyer needs money from you. If the reason behind this is the previous credit as the buyer had taken from somebody. Then you should check as to why the credit score was too low. Especially latest credit history is most important. If the buyer has a good credit history now and some years back the history was not in a good shape then it is considerable.
For any sort of bankruptcy, there should be a genuine reason. Some reasons as can be accepted are death in the family, loss of job, a divorce or some serious health issue with some close family member. Reasons as are not valid are over expenditure on unnecessary things. Actually if a person who experiences some untoward incident and had maintained a good credit score before that is liable to be trusted again but people who have got habituated in maintaining a bad credit score cannot be trusted times and again.
People who come out of a bankruptcy are trusted by some companies and allotted loans. Rates of such loans remain comparatively higher taking into consideration the risk involved. These loans serve as an opportunity for the buyers to redeem their esteem and bring their credit history on the right track.
A proper study of the credit report tells you about the actual willingness and ability of the buyer. Buyers who don’t take much care about the credit will have a bad credit score. This bad track record might be spread out over several years. Those who have some genuine reason or an incident that happened in their life and has maintained a good track record before and after bankruptcy can be considered as a favorable case to be given a loan.
So if you are a potential creditor you need to go through all the above written facts. You are supposed to check various aspects that are involved for coming to a conclusion regarding whether to finance some buyer or not. This is important from you firstly you will earn interest from the buyers; secondly you need to worry about the seriousness with which he is going to repay you. If the buyer is sincere in paying back then it is a good investment from your side. Unfortunately if the buyer shows a casual behavior and does not show any interest in paying back on time then it becomes a sort of head ache. So it is up to you which buyer you will lend money.
Main gist of this is that for being a potential creditor one needs to do a thorough checking of the track record of credit history of the buyer and then only arrive at some conclusion.
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