The companies who lend money or give credit to individuals and businesses can understand that it’s a big problem when customers don’t pay back the credit they owe. This is a very common situation that you give someone a credit limit but they either fail to make payments on time or just refuse to pay claiming they don’t have any money. In order to save the trouble from such a situation, lenders and credit companies are advised to prepare a credit application form and get it filled and signed by the applicant. This application form certainly doesn’t mean you will get the money back but it gives you extra coverage and security and helps you in the process of collecting bad debts or overdue credits.
How do you fill out a credit application?
Here are some helpful tips for you to create your own credit card application forms. There are basically two types of credit application forms including;
Personal Credit Application Form:
This application form is mostly used when an individual wants to get loan or credit card from a bank or credit company. It is very a very simple document that states all the information about the applicant along with the credit limit he is requesting and he allows the credit company to verify his financial details given by him on the application form. With this document, Credit Company verifies all the details and then decides on credit limit for that individual.
Business to Business or B2B Credit Application Form:
This is a bit complicated and more corporate type of credit application form. It’s mostly used by companies who are requesting line of credit or want to get products or services on credit limits. Usually when a company wants to get credit from a bank, they need to go with the B2B credit application form as it includes more complicated and detailed information along with comprehensive terms and conditions usually not seen in a personal application form.
Tips for creating a credit application form of your own:
Understanding the purpose:
Keep in mind that a credit application form serves two purposes; it provides information of all involved parties and at the same time, it serves as an agreement. This means when you are drafting this application form yourself, you need to make it clear in your mind what you want to achieve with this letter. Go through some sample credit forms and you will understand what items should be included in the agreement.
Information of all Involved Parties:
When we talk about a credit application, there are always two key parties; one who is asking for credit and 2nd who is granting the credit. This document will only be considered valid and legal if complete details of each party are mentioned clearly. Starting with the individual or company who is asking for line of credit and here this application should state full name of the individual or company’s representative, company name, address and full contact info including phone number, fax and email. Then it’s time to move to the details of seller or principal company who is approving credit limit. Start with company name, address and contact info and conclude with the personnel who are authorized to sign this agreement.
References and Income Details:
This is a very crucial part of the credit application form as it will paint a picture for you about how worthy the customer is and how much credit it can afford to payback. Here in this part, you should ask the applicant to provide his bank details, at least 2-3 references either personal or companies that can vouch for him and this part should also state applicant’s source of income along with average annual income. These details will allow you to approve specific limit of credit and have the security that it will be returned safely with help of reference providers.
Now this is the main part of the credit application form as it will include most important details. Starting with the credit limit that the applicant is requesting and the minimum credit limit that he can accept. The principal company needs to mention payment return terms and conditions here and the applicant has to agree with all of these terms. The amount paid per month or periodically should be clearly stated here and the applicant should agree with it. In case payment is past-due, the lender will have the right to charge interest to the creditor and he should agree to pay the percentage of interest specified in the application form. At the end, this portion can be concluded with the statement that applicant agrees the lender’s right to bank information, previous credit history and his account details without any objection.
Signature of Both Parties:
This document is just a piece of paper if there are no signatures of concerned parties. At the end of the credit application form, there should be a part where the creditor puts his signature and agrees to all terms and conditions mentioned in the form and the principal company or lender’s authorized employee puts his signature to verify that they also agree with all terms and conditions.
Free Credit Application Forms
Download these free Credit Application Forms to assist you in preparing and filling in your own Credit Application to your bank.