QUESTION: How do banks assess a borrower's creditworthiness?

Modern banks and microfinance organizations approach the assessment of potential borrowers' creditworthiness comprehensively, using automated scoring systems and manual verification by specialists. The main goal of such verification is to minimize the risks of non-repayment of borrowed funds and to ensure that the client will be able to fulfill their financial obligations to the lending institution on time and in full.

The first and most important factor is the level of confirmed official income and employment stability. Banks carefully check the borrower's work experience, requiring employment certificates, pension fund statements, or tax returns for the self-employed. The presence of a permanent source of income and sufficient experience at the last place of work serve as a weighty argument in favor of the client's reliability.

The second critical element is the credit history, which stores complete information about all past and current loans of a person. Creditors carefully study the presence of past overdues, lawsuits, currently open loans, and overall payment discipline. Based on these data, a personal credit rating is formed, which directly affects the bank's decision to issue money and the established interest rate.

Additionally, credit specialists evaluate the debt-to-income ratio, marital status, presence of dependents, and even behavioral factors. The latter refers to how the client fills out the application, how they behave on the website or in the bank branch, as well as their general expenses. The combination of all these parameters makes it possible to draw up a detailed financial portrait of the borrower and make an informed decision.