How Irish banks assess you
Banks issue 2C’s based on 4C’s of a C.
Let me be clearer… Irish Bank issue credit cards (2C’s), based on collateral, capacity, character and credit worthiness (4C’s), of a customer (C).
These factors or 4c’s ensure that credit will be satisfactorily repaid based on probability principles of statistical mathematics which calculates a credit score based on information input.
Collateral is required in order to securitize a credit card. A steady and regularly paying job is good collateral for issue of a credit card. The credit limit offered on the card however depends upon investments and savings held by the prospective customer.
Capacity is another very important criterion for assessment of a customer. The answer to whether the customer can service the credit card lies in his or her income level. No bank or institution has a fixed minimum requirement of income, all of them review the applications on a case to case basis and a low income need not be a disqualifier. However, an extremely high income does not necesarily mean you qualify. For example, if you live with your parents, and your parents have bad credit…. YOU HAVE BAD CREDIT.
I applied on the same day, at the same institution for my first credit card ith my girlfriend. It was both our first credit card application. I was in full time employment with a reputable multinational earning the same amount as my parents put together. My girlfriend was an UNEMPLOYED STUDENT. I had no debts and my finances were, to say the least, excellent. Two weeks later, we got out applications back. She was offered a creit card with a €5000 limit. I was denied. After a lot of research and getting no information from the issuing establishment, I sought my own answers which the source of I cannot mention. It turns out my step-father had an extremely poor credit rating, therefore, although I have not spoken to him in six years, I have an extremely poor credit rating.
Although all banks and financial institutions have seen an increase in credit card applications over the past few years, but none of them have changed the eligibility criteria, which seems to prove that more and more people are qualifying for credit in the currently booming Irish economy.
Character essentially means the dependability of the customer. This is certainly not a mathematical assessment and is very subjective, especially in the Irish market. This is generally done by assessing information filled in on the credit card application. For example the credit card company may have other cards issued in the same office where the applicant works and they have a good repayment record. This may qualify the application since “A man is known by the company he keeps”.
The Irish Credit Bureau (ICB) services most of Irish financial institutions and banks in assessing credit worthiness, by using their immensely large database consisting of details of personal credit contracts and payment histories. A very high degree of importance is given to history of ownership of other credit cards. Using these as basic data, the ICB assigns a credit rating to every applicant.
Immigrants and others who have come to Ireland form other countries face the biggest problem in procuring an Irish credit card because they do not have any credit rating or credit history. The other category that face problems in getting a credit card are, the unemployed with no regular income or students with no source of income. However some banks offer additional credit card to students as an extension of their parent’s credit subject to their approval.
However all institutions do not use the ICB rating as a benchmark for credit rating. Some of them review the applications on a case to case basis and if necessary the applicant could also be interviewed.
“ICB also allows applicants and others to assess their own credit records” - If anyone can source this, please, let us know.