Credit history and its impact on loan approvals has become an increasingly common topic in IELTS Writing Task 2. Based on recent exam patterns, questions about personal financial responsibility and credit management appear approximately every 3-4 months, making it a highly relevant topic for test-takers.
Understanding loan approval process and credit history is crucial for achieving a high band score in IELTS Writing Task 2. Let’s analyze a recent exam question and explore sample essays across different band scores.
Question Analysis
Some people believe that banks should check applicants’ credit history before approving loans, while others think everyone deserves equal access to financial services regardless of their past. Discuss both views and give your opinion.
This question requires candidates to:
- Discuss two contrasting viewpoints about credit history checks
- Present arguments for and against credit history screening
- Provide a clear personal stance
- Support arguments with relevant examples
Understanding credit history importance in loan approval process
Band 8 Sample Essay
Good credit history plays a vital role in credit scores and loan approvals, and while some argue for universal access to loans, I believe banks must consider applicants’ credit records for responsible lending.
Those opposing credit checks argue that financial services should be accessible to everyone. They contend that denying loans based on past mistakes perpetuates economic inequality and prevents people from improving their situations. For instance, individuals who experienced temporary financial hardships due to medical emergencies or job loss may be unfairly excluded from obtaining necessary loans for business ventures or education.
However, proponents of credit screening emphasize its crucial role in maintaining financial stability. Banks need to assess default risks to protect both their interests and those of other depositors. Furthermore, checking credit history encourages importance of personal financial discipline and responsible borrowing behavior. For example, in countries with robust credit reporting systems, people tend to manage their finances more carefully to maintain good credit scores.
In my opinion, while universal access to financial services is ideal, credit history checks are necessary for sustainable banking practices. The solution lies in creating more flexible assessment criteria and offering alternative financial products for those with poor credit history, rather than completely disregarding past financial behavior.
Band 6.5 Sample Essay
Many people have different opinions about whether banks should check credit history before giving loans. This essay will discuss both sides and give my view.
Some people think everyone should get loans easily without checking their credit history. They say it’s not fair to judge people by their past mistakes. For example, someone might have had problems paying bills because they lost their job, but now they have a good job and can pay back a loan. These people believe banks should give everyone a chance.
On the other hand, importance of protecting credit history supporters say banks must be careful with money. If they give loans to people who don’t pay back, it can cause problems for the bank and other customers. Also, when people know banks check credit history, they try harder to pay bills on time.
I think banks should check credit history but also look at other things. Maybe they can give smaller loans to people with bad credit history or help them improve their credit score first.
Key Vocabulary
- Credit history (n) /ˈkred.ɪt ˌhɪs.tər.i/ – record of past borrowing and repayment
- Financial stability (n) /faɪˈnæn.ʃəl stəˈbɪl.ə.ti/ – condition of having steady finances
- Default risk (n) /dɪˈfɔːlt rɪsk/ – possibility of failing to repay a loan
- Perpetuate (v) /pərˈpetʃ.u.eɪt/ – cause to continue
- Assessment criteria (n) /əˈses.mənt kraɪˈtɪə.ri.ə/ – standards used for evaluation
Consider practicing with this similar question: “Some argue that credit scores should be the main factor in loan approval decisions, while others believe banks should focus more on current income and employment status. Discuss both views and give your opinion.”
Feel free to share your practice essays in the comments section for feedback and improvement suggestions.
