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Good Borrowers Think like Lenders

By Sally Maison
Published: Monday, July 12th, 2010

Lenders look on different factors before they approve on a person’s loan or mortgage application. One basic and large factor that they check on is your credit history. One way to maintain a good credit history and let only positive reports be reflected on your credit report is understanding how money works.

Reading books that talk about money will help you keep your finances on track. You’d be bale to get a lot of information about what to do and what not to do when applying or paying off for a loan. The information that you get from the books will help you come up with better options and wiser decisions with your money. The more you know about handling money, the better your financial state could go.

One does not need to be in a financing crash course to fully understand how money works and how it should be managed. Think of money as time; you’d never want to waste any of it. Spend more on needs and not your wants. Be the wisest spender as much as you can and you’ll see the positive gain you could get from doing it. Once you realize all the hard work that you do just to earn money, you will have a different point of view about spending. You’ll see money in a different way and may lead you to lesser usage of your credit cards.

Lenders do not only look on our credit scores or history as a lot of us conceive. Other factors like you income, savings and employment history could also be determinants. Try your best to keep these three things in order for they could help you get a good score and impressive overall credit. Keep your finances in good shape and lenders will have no second thoughts investing on you.

When asking for a credit report, credit report agencies do not only provide for the credit score but also the reason or reasons why the score is quite low. Some of the most common reasons for low score are as follow:

  • having lots of new accounts
  • late payments or unpaid accounts
  • having short-term credit record
  • serious delinquency
  • too much debts incurred or owed
  • Bankruptcy and uncollected debt report from collection agency or agencies.

Knowing what lenders usually look on will make you more anxious of your credits.

Any lender would like to see that their prospect clients are stable; stable not just financially but also with their homes. Try not to move out a lot. But how could frequent moving out affect your credit? Every time you move, some of your credit information should be changed like your bank location and account. This would actually bring about negative effect because you won’t be able to build stability and long-term business relationship with your lender.

If you wish to lean more about keeping your finances and credit on track, ask an experts advice or maybe check out some online resources for free lessons.

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