You call the bank and set up a meeting with your banker. You may or may not be told to bring your pay statement. The time comes and you sit down with your banker and they ask for more documents. You brought your pay statement and that was it. What about the other documents that you didn’t know about? A banker generally needs more documents than just a pay statement in order to approve a credit request. “Okay” you say. “What do I need to bring?”
Being a former banker, and having applied for credit myself personally, I can tell you what the banker will need to see. Not every banker will need every document I list here. I am providing the list so that you are the most prepared and will not need to provide anything else, which may potentially cause a delay in your credit application approval. Keep in mind each bank has their own policy as to what they need. It is better to be prepared and not need it than to not be prepared and need it, causing delays.
Three things you need to have when applying for credit
The first thing you will need is photo identification, so your driver’s licence. Your passport is acceptable as well as it is a photo ID as well. A secondary piece of ID will be needed which may vary from bank to bank. This piece of ID needs to have your signature on it, and can be issued by various institutions. Examples would be a credit card, health care card, or other identification issued by the government.
The second thing you will need is a copy of your pay statements. The three most recent ones will work as it shows consistency in earnings. An employment confirmation letter from your employer strengthens the earnings documentation requirement. This letter should be dated no more than two weeks old from the meeting with your banker. Lastly, providing a T4 (Canada) or W-2 (United States) shows your taxable income that the banks like to use and is a solid base that the banker can use for documenting your income. With these documents, the banker will not need anything else to confirm your employment income.
The third thing you will need is an understanding of your current credit circumstances. You must know where you are financially when applying for credit. In having your pay statements, you have an idea of your ability to pay (Capacity C), you also need to know what your credit worthiness is. Another way to put it is you need to know what your credit history looks like, and that is summarized nicely on your credit report. Having a copy of your credit report shows the banker that you are serious about credit because you are informed and are ready to talk about your current credit picture. The banker does not need your credit report, they will use their own. When you have your credit report with you it is showing that you have an idea of your credit history (Credit History C), and it will be noticed.
There are other documents that are “nice to have” documents, such as asset values confirmation, credit account statements, a net worth statement and others. These other documents will take time and effort to put together, but if done so, you will look like a professional borrower and not someone who is unprepared and crossing their fingers, hoping to get approved. When you are prepared, the banker takes notice and will work with you to get approved because you had put in the effort first to make it as easy as possible for them to approve you, so they will then put in the effort they may need to.
You have more control over the credit application process and credit approval than you realize. When you know what is being looked at and what is being measured in the credit application and what is needed to get approved for credit, you are able strengthen these areas. This can be done before you meet with the banker to apply for credit. When you are able to give what the banker is looking for to them, it becomes easier to get approved for the credit you want at the interest rate you deserve. I can show you what you need to do given your specific individual credit circumstances. If you would like to work with me, please contact me.