What An Application Form Really Asks

lenders questions

What An Application Form Really Asks

We do it without even thinking, whenever you apply for anything from a bank loan to a credit card or mobile phone contract there are always questions that get asked every time. Most people will never question why they are being asked these questions, after all it is just part of the ‘process’ right? Wrong.

Whenever you do something that involves credit, directly or indirectly the same questions come out. They are asked for very specific reasons, let me enlighten you.

Basic Information Please

Questions such as;

  • Full name
  • Date of birth
  • Time at home address etc

These are all basics, this is about identifying who the lender (I use this term as there is always a credit element somewhere) is working with. The lender will check voters roll, credit records and CIFAS entries. CIFAS is a fraud database which stores information if you have made a false claim or have been subject to identity fraud.

Questions such as this simply allow the lender to identify you and help them cover off their legal obligations.

It then gets more interesting.

Follow Up Information

These are questions such as;

  • Type of property
  • How long at your address
  • Your job
  • Homeowner or tenant
  • Landline number
  • Do you have a credit card
  • Marital status

You know the type of questions, they are normally on page two or they follow the name and address part. These questions are all about stability.

The theory is that if you are a homeowner, been in your same job 15 years, are married and live in a nice house then you are less likely to do a runner. Your employer obviously trusts you (they have employed you for 15 years), the bank trust you with a mortgage and you are settled down married.

OK, it is not all 100% reliable but the theory stands up, it is also statistically proven. If you compare that profile to someone who is divorced, lives in rented accommodation, has no ties and has had several jobs in the last few years, then you get the gist. They could more easily up sticks and move.

Warning Sign Questions

These are a combination of answers you give to different questions. The theory is that your lifestyle should match who you say you are. This is taken from questions such as;

  • Job role & industry
  • Time in role
  • Any dependants
  • Credit card held
  • Mortgage
  • Qualifications

This is all about comparing you with the norm. It is judgemental to a degree but it is aimed at flagging something that doesn’t look right.

If you are a legal professional, earn good money, have been in your job for years and are well qualified then if you said you had no credit card, no mortgage and no landline phone then the alarm bells would start ringing, why would this be the case?

Where a conflict of information occurs then expect the lender to ask for clarification, or if you have answered like that then don’t be surprised if the lender says no.

A similar situation occurs when there are no previous searches on your credit report, yet you claim to be a credit card holder with mobile phone and your own property. It doesn’t add up.

Summary

Next time you are filling out your application then consider why you are being asked, there isn’t anything you can do but it is good to know why these questions are relevant.

By Dave Farmer

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