Understand how lenders decide who gets a loan and who doesn’t.
Lenders look at your credit application (income and debts) as well as your credit report (payment history). All the information is evaluated from your payment history, amounts owed on specific accounts, and the number and types of accounts you have, among other factors. To get your credit score lenders initially don’t consider your occupation, salary or employment history. By using a statistical program that compares your credit information with the credit performance of consumers who fit similar profiles, lenders award points for each factor to help them determine whether or not to give you credit. The total number of points – the credit score – helps predict your creditworthiness – in other words, how likely it is that you will repay the loan and make timely payments. Learn more about credit scoring and how you can improve your credit score.
P.S. If you’re worried about bad credit and how it may count against you when you apply for a loan, click here to read our FREE e-Report, “Credit Repair: How To Move From Rejection To Approval.”