What Credit Score Factors Usually Affect Borrowing?
Everyone talks about how credit scores affect borrowing, but other credit score factors affect borrowing as much as or more than the score itself. You can have a great FICO score and still be denied because of these other factors. Most people don't realize things like how much they owe or how long they've been using a credit card can affect their borrowing ability in both good and bad ways. Here are six other credit score factors that are affecting your ability to borrow.
Six Credit Score Factors You Should Know About
1. Your Payment History
When it comes to any credit score factors, payment history affects both your score and your borrowing eligibility. You should have everything paid on time, but having a late payment every once in a while isn't always terrible. What lenders do look at are regularly missed payments on several accounts and payments that stretch beyond 60 days. As long as a missed payment doesn’t become a regular occurrence, you should be just fine.
2. Amounts Your Owe
Some people may think that owing a lot of money means you can borrow even more when you apply for a loan. Even though many may think this way, that simply isn't true. Lenders use a debt-to-income ratio to decide whether you can handle another loan. Typically, they don't want more than 30 percent of your income to pay the debt. This is one of the biggest credit score factors that affect large purchases like getting a mortgage or a car.
3. Credit History Length
You will want some long-term relationships on your credit report, as this relationship is seen as a positive credit score factor. However, you don't want to hold debt for too long, or it could quickly be one of the negative credit score factors. It should be a relationship where you pay off the debt regularly but still have an active account. This can be done by using a credit card for smaller purchases and paying it off monthly.
4. New Credit
Some of the biggest credit score factors you’ll experience includes seeking new credit too often. Lenders look to see if you've had your credit pulled numerous times in seeking new loans and how much new credit is on your currently report. Too much new credit is a bad sign of your projected creditworthiness and will negatively affect your ability to borrow money from a bank loan.
5. Mixing Up Credit
Most people don't realize this, but having different types of credit is a positive thing when it comes to borrowing. This means you shouldn't have only credit cards on your account, but also a vehicle loan or a home loan, maybe even a personal loan to mix up the types of credit you have even more. This doesn't mean you should apply for everything. Be smart and strategic in how you borrow and how much you borrow.
6. Your Checking Account Balance
Many lenders ask for a current checking account balance as part of their loan application. They want to know if you have money left after paying your bills and discretionary spending to actually handle the loan repayments on time. That is an important factor because it lets them know whether or not you can pay for the loan; if they see that you won’t be able to handle it, that will more than likely mean you won’t get approved.
What If I Can't Get A Loan?
Some people may be denied loans from banks because of these credit score factors negatively impacting their credit. However, a bad credit title loan online is an option. This is a short-term loan that can pay for unexpected situations where you need cash quickly. We here at Fast Auto Loans, Inc. offer title loans when you have a lien-free title to use as collateral. Title loan amounts range from $300 to $15,000 depending on other factors like the value and overall condition of your vehicle.
Getting a bad credit title loan with Fast Auto Loans, Inc. is easy and can be done in as little as 30 minutes once you meet with a loan representative. The first thing you can do if you're interested in one of these loans is to fill out the online form seeking information. A loan representative from the title loan store closest to you will call and arrange to meet you either at the store or at a place where you feel most comfortable to assess your items and inspect your vehicle.
Learn About The Factors That Impact Your Credit
When it comes to your credit, you need to know the credit score factors that can negatively and positively impact your score. Just knowing these six things can help you better understand and navigate your credit and your chances of getting a loan. And if you still have poor credit but need a loan, you can come see us at Fast Auto Loans, Inc. for a bad credit title loan. Fill out the online form to get started.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.