| |
| |
|
|
Credit Information |
|
How Creditors Measure Your Credit Rating
Creditors will measure your credit rating based on the following three main things. The three "C's" show creditors your:
1. Capacity The very first question is whether you have sufficient income to repay the debt. Creditors will definitely check to see if your income exceeds your expenses so that you ca comfortably pay the debt. A creditor will then want to know:
The amount remaining from your total net income, after deducting your fixed monthly expenses and other debts, is your capacity. If your net income is $3,000 a month and your total living expenses is $2,500, then your credit capacity is an amount that requires no more than $500 in monthly payments. If you now pay $400 a month for other credit obligations, then your remaining capacity is a $100 a month, and a creditor should extend you that amount of credit. There are three techniques that will allow you to maximize your income:
2. Collateral A lender or creditor can be secured or unsecured. Secured lenders hold a lien against specific assets, such as real estate, an automobile, or boat. If you fail to pay, the secured lender can sell the pledged asset to recover debt owed. Secured lenders seldom loan more than the auction value of the collateral. Secured credit, is an almost guaranteed way to rebuild your credit. Even with poor credit, a lender may advance your credit if you ca secure the credit with a lien against some valuable asset. Many creditors extend credit entirely on the strength of the pledged assets. Other credit considerations are either ignored or carry comparatively little weight in the credit decision. What can you use as a collateral to secure your debts and rebuild your credit? You may be appreciably wealthier than you think. Add the value of your various assets (property that you own) and subtract any existing mortgages or lies against those assets. The difference is your equity or net worth in the asset. This is what you have available to secure a loan. Do not overlook any asset:
You may have other assets to pledge. The point is that collateral gives you a borrowing power approximately equal to your equity in your assets. Regardless of your credit history, if you have collateral worth a solid $100,000, you should be able to borrow close to that amount. 3. Character Creditors next consider your character. How important this is depends upon the type of credit, and who your creditors are. Asset based lenders rely chiefly on collateral, and they are less concerned with your character than are unsecured creditors who can only rely on your prior reliability for honoring your obligations. When creditors check your character, they basically look at how you satisfied your past obligations. Meaning they want to know:
Positive answers to these nine questions will often offset an otherwise negative credit report. Basically your credit character boils down to your credit history in the past. In the eyes of creditors, if your past credit character is good, there is no reason to believe why your future won't look promising. About The Author © Copyright. http://www.deleteuglycredit.com Omar M. Omar is the owner of http://www.deleteuglycredit.com. The website is dedicated to provide credit consumers with information about their credit right and how to dispute inaccurate information on their credit report. Omar M. Omar is also the author Of "The Credit Repair Bible" book. You have permission to publish this article electronically or in print, in your Newsletter, on your website, or in your E-Book, as long as the author's Resource Box is included with the article.
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
10 Dirty Tricks Credit Card Companies Play The credit card companies make billions each year in legitimate interest charges and fees, but are under constant pressure from the shareholders to increase their earnings. To make this extra money the credit card companies sometime adopt some dirty tricks to make this money. Can Credit Search Entries Affect Your Ability to get Approved for a New Loan in the UK? About Search Entries:Every time a lender checks your credit history from your credit file (i.e. Your Guide On Choosing a Credit Card To Suit You Reach into your wallet or purse, pull out a card, swipe, and you're done. It is very easy to use a credit card. 10 Signs You May Need Credit Counseling Debt management programs can be of real help for people that discover they cannot face their debts. At first, they will attempt to solve the situation all by themselves by cutting down on spending and keeping a close eye on accounts. How To Protect Yourself Against Credit Card Fraud In the high tech world of today, credit card fraud is an ever increasing problem.By 2005 it is estimated that the online payment industry will capture $12. Credit Repair, How To Credit repair, is in a word, vital to reestablishing your credit. Unless you plan to never use your credit again, then you have to find a way to fix it. What Are The Most Common Credit Card Mistakes? Now in a world with so many easy to get credit cards it can be easy for someone who is a first time credit card holder, or even someone who has several credit cards in the past to make mistakes when using the card.One of the most common mistakes when using credit cards is to use the credit card to make purchases of things you are not really able to afford. Credit Suicide Few things influence the home buying process more than your credit. I like how Clark Howard refers to the three credit repositories as, "the three screw-ups". What You Need to Know About Credit Reports You hear people talk about credit reports all the time but do you know what they are really all about? Well, if you have ever been turned down when applying for a credit card or a loan it is high time you learned all about your credit report and how you can get it working for you instead of against you.Let's start off by explaining what your credit report actually is. How You Can Avoid Becoming A Victim Of Identity Theft To reduce or minimize the risk of becoming a victim of identity theft or fraud, there are some basic steps you can take.The most important one is to ask periodically for a copy of your credit report. A Summary of the Fair Credit Reporting Act This summary of the Fair Credit Reporting Act will explain what you can legally do if you want to repair your own credit report. No matter what you hear, you can dispute credit information on your credit report if you understand the legal rights you have under this law. Good Credit -- Essential for the Prospective Home Buyer Credit is a funny thing. It can be a useful tool in the hands of an informed individual, or a weight of burden to the unsuspecting. Free Credit Reports: From The 3 Major Credit Bureaus! Get your credit report online for FREE. Many financial advisors suggest that you periodically review your credit report for inaccuracies or omissions. Fixing A Credit Report Fixing a credit report starts with seeing what's on it. You may get access for free online. Manage Your Credit Wisely Getting your first credit card is a big deal and all young people look forward to it with bated breath. We wait for years to be able to apply successfully for out own credit card. Finance - Money, Money Finance is a big word for some of us. It's a little scary. Credit and Banking Money Saving Services The first rule when applying for banking and credit services is to always read the fine print and to understand all of it. Read up, take it home, and analyze it, ask the banking manager questions. Five Credit Card Billing Problems and How to Fix Them It goes without saying that your first and best defense against paying fraudulent or unfair charges on your credit card is knowing what your bill says! When you receive your credit card statement each month, sit down with it and check each item to make sure that you actually DID purchase it. If you do run into inaccuracies or problems, there are procedures to follow to report and deal with the charges. UPS Delivers the Goods, Your Identity Well now we add CitiGroup and UPS to the Identity Theft corporations who have allowed Americans identity to be lost. Each time we have another identity theft case, we find larger and large numbers being lost. Credit Card Debt: How To Control It A lot of people spend more money than they can afford to repay toward their credit card debts. To regain control over your finances and to manage your debt, here are some solutions you can try.
|
||||||||||||||||||||||||
