Before granting a loan, every bank assesses the risk that you won't pay it back. This analysis, known as scoring or risk assessment, determines not only whether you're approved for financing, but also under what conditions (interest rate, term, maximum amount). Improving your credit profile before applying for a loan can translate into better terms.
What banks actually assess
While each institution has its own internal scoring model, the most common factors analyzed include:
- Income stability: type of contract, tenure at your current job, regularity of income.
- Current debt level: how much of your income already goes toward paying other debts (mortgage, loans, credit cards).
- Payment history: whether you've had previous defaults recorded in credit bureau files.
- Relationship with the bank itself: how long you've been a customer, products you hold, regular activity in your accounts.
The debt-to-income ratio: the 30-35% rule
A general rule many institutions apply is that your total debt payments (mortgage, loans, credit card financing) shouldn't exceed 30-35% of your monthly net income. Going above that threshold usually makes it harder to get new financing approved, or significantly worsens the terms offered.
How to check and clean up your credit history
If you're unsure whether you appear in any default/credit bureau file, you can check these files directly to confirm your status and, if you're listed incorrectly (an already-settled debt still showing up, for example), request a correction. Being listed in these files, even for a small amount, can be enough reason for a bank to reject a financing application.
Practical steps to improve your profile before applying
- Pay off or reduce small outstanding debts, especially any that might appear in credit bureau files.
- Avoid applying for several loans or cards in a short period of time: each application can generate an inquiry that, when they pile up, signals an urgent need for liquidity.
- Have your salary paid into and maintain a steady relationship with the bank you're going to apply to, as this is usually viewed favorably.
- Don't max out your credit card limits in the months before applying, since very heavy use of available credit can be read as a sign of financial strain.
It's not all up to you: the CIRBE matters too
Beyond your personal history, banks check the Bank of Spain's Risk Information Center (CIRBE), which records your aggregate debt with all Spanish financial institutions. A high total debt level, even if fully up to date on payments, can limit the amount a new bank is willing to lend you.
Compare terms before signing
Once your credit profile is in good shape, our personal loan calculator lets you compare the monthly payment and real APR of different offers before deciding which one to sign.