The United States is a consumer-centric country. Nearly all products and services in the United States can be financed by purchasers anxious to buy. As such, some consumers find themselves heavily in debt. One of the best ways to get back on the track to financial security is debt consolidation. However, if a consumer needs to consolidate, he must disclose certain private documents.
Credit
The most crucial piece of information that a consumer must disclose for a consolidation is his credit report. To comply with the Fair Credit Reporting Act (FCRA), lenders must get a borrower's consent to pull a credit report. This consent can be verbal, but some lenders get the authorization in writing to protect themselves. This information is highly representative of a consumer's future borrowing behavior. Therefore, it is a necessary disclosure.
Documents, Delinquency
If a lender finds considerable delinquencies on a credit report, he will likely ask not only for a full explanation (sometimes called a hardship letter), but also all documents corroborating a consumer's claims. These documents are sometimes private letters from physicians detailing medical injuries, disabilities or other ailments. Sometimes these documents are award letters from the Social Security and Disability office. In any case, these documents are often required for customers with serious credit problems.
Verification of Employment
Some consolidation lenders will ask for a Verification of Employment (VOE) prior to making a consolidation loan. These are often required on consolidation applications that show less than one year of consistent work history with a current employer. VOEs detail the nature of an employee's work--including hours per week, chance of continued employment and any official reprimands. In most cases, if a consumer with an unstable work history cannot provide a VOE, a loan will not be extended.
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