A history of good credit shows the lender that they can count on you to make your payments on time, and that their investment in you is a smart one.
What's in a credit report?
A credit report is a detailed look at the loans or lines of credit you have now, or have had in the past. Specifically, your report typically shows:
- Debt from the past seven years, including student, car and personal loans, as well as credit cards
- How much credit is currently extended to you
- Whether you've been late or delinquent on payments to utilities, credit card companies or other lenders
All of these elements combine to make up your FICO® credit score—a number that sums up your credit habits. While it's just one factor used in making a decision on your loan application, it's an important one.
Checking yourself out
Consider checking your own credit before applying for a loan. This can allow you to clear up discrepancies that could affect your loan approval. You can get your report from any of the three main reporting agencies:
- Equifax: 800.685.1111
- TransUnion: 800.888.4213
- Experian: 888.397.3742
What if you don't have credit?
If you haven't established a credit history, lenders may be able to use other tools to determine your ability to make loan payments. These include:
- Utility bill payments
- Insurance payments
- Rent payment history
- Letters from creditors
We can help you determine what steps to take to demonstrate your good financial habits.
Improving your credit
Many perfectly responsible individuals have less-than-perfect credit. There are steps you can take to improve yours, such as:
Make payments on time. If you're behind on any bills, get caught up.
Don't pay off debt by moving it to another account. The number of accounts you open and close affects your credit score.
Keep balances on credit cards low. Pay them off completely whenever possible.
Don't open credit lines or accounts you don't need. The more accounts you have, the riskier you look to lenders.
Consider closing unused accounts. Each account you have is an opportunity to create debt.
Talk to your creditors. If you have to miss a payment, call the creditor before the due date. They may work with you to reset payment dates and reverse late fees.
For your free credit report analysis call 415-345-0794