Many people are curious about how to make a loan application to multiple banks or to apply for a loan to a large number of banks on the same day.
Credit rating is a rating that reflects the credit history that banks use to approve and sometimes reject applications. Each time a bank checks the credit history to evaluate an application, the credit rating is affected.
What Happens When A Loan Application Is Made?
Banks need to check your credit history to evaluate your loan applications.
Your credit history, credits, credit cards, accounts count, whether you’ve paid on time, or if you’ve previously passed a legal follow-up due to your debts. Credit history is the best way to check this and similar information.
Rather than review your full credit history, many banks check your credit rating to assess your application more quickly. Because your credit rating is a summary of all the information in your credit history.
When a bank checks your credit note, for example to evaluate your loan application, an inquiry is performed on your credit report. This inquiry in your credit report over the last 12 months affects your credit rating.
How Many Applications Affect the Credit Rating?
A single credit application is unlikely to cause any major damage to your credit rating.
Your credit history will absorb the impact of a single loan application, no matter how bad or good it is. However, making multiple credit applications to more than one bank in a short time will cause serious damage to your credit rating.
For example, applying for loans at the same time to all banks or applying to different banks on different days on the same day or shorter intervals will damage your credit rating, but will also reduce the possibility of your credit being approved.
Even if your credit rating isn’t going to suffer much from a few loan applications, banks may refuse your loan application because you’ve made intensive applications recently.
A large number of new loan applications can be perceived as despair, and this may indicate that your current financial situation is probably not good, which may lead to a negative result of your loan application.
The approval or refusal of your credit application does not affect your credit rating, at least directly.
If your application is approved, it may be said that with a simple mathematics, your credit rating may be temporarily reduced at a specified rate, as the opening of new credit products affects your credit rating by 11 percent.
However, the approval of your loan application will have a positive impact on your grade, as the average credit history will increase your age.
On the other hand, rejecting your application will not affect your credit rating.