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Quotation

"Take care, don't fight, and remember: if you do not choose to lead, you will forever be led by others. Find what scares you, and do it. And you can make a difference, if you choose to do so."

J. Michael Straczynski
 


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Biggest Factors That Affect Your Credit

When you are facing an economy like the one that you are currently facing it can be extremely hard to maintain a good credit score. However, getting in debt is like a snowball rolling downhill. It is only going to grow and grow until you reach a breaking point where you will be completely overwhelmed. 

This is frightening when you consider that a lot of employers and lender determine your risk examining your credit score. So, potentially a bad credit score could hurt your chances of securing a loan and getting a job. In order to avoid going into debt you need to understand the biggest factor that can affect your credit score and that is what you are going to learn below.

The History Of Payments

When you are going to a bank to get a loan there is one question that the lender is going to consider before granting the money. That question is going to be, “Can this individual pay back the money?” Well, the only way that they can determine if you are going to pay back the money is pay looking at your previous payment history with other lenders and billing firms. Have you always paid your bills on time? Of course, the more times you have paid late, the more it is going to hurt you If you did pay late, how late were you? The later you paid, the worse it is going to be for you. If you have any bills that have turned you into a collection agency, you are probably going to be looking at an instant denial. These records will count for about 35 percent of your credit score.

How Much Do You Owe?

It shouldn’t come as a big surprise that you need to remove negative items on your credit report before trying to apply for a loan. However, what if you are making your payments, but you are almost at your credit limits? For instance, if you are bringing in $60,000 a year, but you are $55,000 in debt, this is going to make you look like a risk. Most lenders will utilize a credit ratio that measures how much in debt you are compared to your available credit limits. Just because you have a $0 balance in your accounts it doesn’t mean that you are going to get the rating you desire. Most lenders are more focused on the total available credit that you have.

How Long Have You Had Credit?

Unfortunately, you are also looked down on if you don’t have any credit at all. It can be extremely hard to establish some kind of credit history when lenders and collectors are not even willing to let you establish your credit. Well, keep in mind that there are a variety of techniques and methods that you can utilize to easily and quickly build your credit. Lenders will often time look at how many obligations you currently have and the length of your oldest obligation. While this amount usually only represent 15 percent of your credit score, it can play a major role.

 
 
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