How to Extend Credit to Tier One Customers

Tier one credit borrowers are those who have FICO score above 720. A FICO score is a three-digit number between 300 and 850 that represents a borrower's overall creditworthiness. FICO stands for Fair Isaac Credit Company and was founded by Bill Fair and Earl Isaac. The FICO score is the universally-accepted score for extending credit. Extending credit to top-tier borrowers is relatively easy.

Instructions

1

Pull a current copy of the borrower's credit report to confirm top-tier status. See Resources for a free resource for pulling credit reports. However, if you are a loan officer at a lending institution, there will be an internal source in the lending software for pulling reports. You must gain the customer's authorization before pulling a credit report.

2

Check the borrower's credit report. If the customer does not have a FICO above 720, he is not a top-tier borrower. However, other factors will affect top-tier status. For example, a borrower could have 730 FICO score but also have a history of mortgage delinquency or credit card delinquency. This borrower similarly will not be qualified for top-tier credit.

3

Review credit options with a top-tier borrower. In most cases, these programs will offer the most competitive interest rates and fees. Note that these borrowers will have several lender options from which to choose. You must present a favorable and advantageous program to gain the customer's business.

4

Collect the documents in the "Things You'll Need" section. Send the borrower's application and documents to your company's underwriting department. These professionals will carefully scrutinize the loan application.

5

Review the final loan terms if anything changed after underwriting approved the loan. Some hiccups might include: a reduced loan amount or raised fees. These changes often occur if a borrower's income is not sufficient to carry a full loan amount.

6

Close the loan with the borrower. If it is an unsecured personal loan, you as a loan officer should be able to handle the closing on your own. If it is a secured loan--such as a mortgage--you will need a notary public to witness the mortgage signing.