Old Credit Issues Ask Your Lender To Manually Underwrite Your Loan

Dated: December 3 2020

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Manual underwriting is how all loans were evaluated before computer algorithmstook the human logic out of the process. Simply stated, a loan that is manuallyunderwritten is one where a person evaluates the file for the borrower’s ability tomake the loan payments. For those who have had credit issues in the past thatare easily explained and understood, requesting a manual underwriter may makethe difference between getting the loan or not. 

Almost everyone has gone through difficult financial times at some point in life.Perhaps a divorce or job layoff caused a glitch in the otherwise good credit of theborrower. A computerized system only catches the credit score and number oflate or missed payments. A good credit risk can turn into a poor one simplybecause a computer can’t understand the circumstances which caused theproblem—but a person can. 

How Does It Work? 

Before an underwriter will approve a loan, they need to understand theborrower’s ability to pay and their overall financial situation. The loan packagewill include bank statements, tax returns, pay stubs, savings accounts, and otherforms of verification. 

The underwriter will review the provided documentation and any personalstatement of explanation provided for negative records. They will consider notjust the credit score, but also recent job promotions and special situations whichexplain a difficult period in an otherwise perfect record of on-time bill paying. Inshort, they can view the overall package from a human perspective and make areasonable decision. 

For anyone who has had a difficult financial history due to divorce, job loss, adeath in the family, or failed business, asking for a manual underwriting reviewcan prove their creditworthiness and obtain a loan that would otherwise havebeen out of reach.

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