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What to Do When the Credit Score Sends a Mixed Message

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BY BILL HULSTRAND

Some loan decisions are crystal clear and others are a bit fuzzy. How do you and your staff decide when to turn down a questionable loan request versus when to say yes? This real world scenario sets the record straight on how to proceed through the haze.

Anyone can make the decision to approve an A + member with great income and low debt. But what about those anyone can make the decision to approve an A + member with great income and low debt. But what about those applications that come in with mixed messages (i.e., decent credit score but some troubling factors)? That’s what separates the great from the merely average decision makers. Let’s look at the following credit report to see a classic example of the “mixed message” loan. But first, here are the basics of the application:
• Loan amount requested: $35,493 for an RV
• Income: $125,000/year
• Debt-to-income: $39.19 percent
• Loan-to-value: 75.83 percent
• Credit score: 692

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