Sept
27
2011
Credit simulation
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Author
Do not submit multiple loan applications simultaneously!
Most loan applicants are unaware that budget calculations are not the only criteria on which acceptance of their file depends: by submitting multiple financing applications at the same time, you may significantly reduce your chances of obtaining a loan from each of the institutions contacted. Explanations.
Multiple applications = instability, and therefore points lost
After submitting a loan application with any banking institute and/or broker, this application is recorded at the Zek, the Swiss Credit Information Centre. All lending establishments can therefore view your other applications and thus assess your stability.
The assessment of your reliability is an important factor in the credit score that determines the application’s outcome, and is even placed above the assessment of your financial situation. A high number of points is therefore lost if you have submitted applications with multiple creditors.
The risks: increased interest rate or a chain of refusals
If you have submitted multiple applications, the first risk you encounter is seeing the interest rate for your loan rise as a penalty. The loan granted may therefore be much less interesting than initially thought.
Even more prejudicial than the interest rate, an average bank that would have initially granted you financing, could reject your application after becoming aware that other banks having already studied your application, issued a rejection. Even if your profile corresponds to the acceptance criteria applied at certain banks, your loan application may therefore be unanimously declined, regardless of the grounds of the previous refusals.