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Credit Scoring - will you be approved? - ADM Loans

Loans Glossary : Credit Scoring

Credit Scoring is the process used by most lenders to help them decide whether or not your loan application will be approved.

Each piece of information you supply on your application will be given a score that reflects the lender's profile of an ideal customer. For example, you may be given a high score for earning over 30,000 a year, but given a low or negative score for earning less than 5,000.

Once each piece of information on your application has been scored in this way, it is usually (but not always) combined with details of your financial history held on your credit file as supplied by a Credit Reference Agency.

If your total score passes a threshold set by the lender, your loan will be approved. Companies are free to each use different scoring criteria, and set different thresholds, so even if you are rejected by one lender your application could be approved by another.