Is your Credit Score Too High ?
At some time in your life you will walk into a bank and apply for a loan or mortgage of some kind. If you live in the western world, the bank will invariably check a central credit agency in order to validate your ability to make payments on the loan that you are applying for. Your banker will tell you to relax, this is painless, as he/she reviews your credit score from the central agency. This will be the time when that critical purchase of a home or new car will cause you to silently say, Darn, I wish I knew how to increase my credit score. We have all been there and done that - some of us more times than we can count.
It seemed that everyone claimed to have heard a trick or two. Others said that constantly querying the credit bureau and challenging them to respond to you within 30 days or as mandated by law would result in the credit agency messing up and the matter being cleared based on a technicality. Truthfully, enough people mentioned the latter, that it appears that this somewhat unorthodox method may have some validity in a few jurisdictions.
As mentioned above, most people simply answered “pay your bills on time and your credit rating will be excellent”. We counter that paying your bills on time is fact expected and that this can give you an average credit rating of 5-700. But is this “pay your bills” thought really true? We are going to name this as myth number 1 and look more closely at it here. Loan institutions absolutely adore customers whom pay off their bills on time every month? We calculate stupendous bank profits in that model, right? The truth is, loan institutions and other lenders including the mafia are in absolute love with people who maintain a nice healthy balance that they can get charged interest on.
Ok, Question number 2. Big borrowers who are simply big borrowers are simply loved by the banks. Is this really true ? If this were the case, people who couldn’t repay loans would get huge amounts of credit and constantly end up in repayment problems. Anyway, if I am wrong on this one, I would be the second in the line chasing you to the nearest bank for a mega loan. I have had my eye on some New York Prime Property for a while now. But this isn’t true is it? So perhaps this is not the answer either.
Could the truth be somewhere in between? Loan institutions love clients who pay something on their bills each month ( preferably just the interest and a little more - kind of like a show good faith on the balance… ) and whom appear to have the ongoing ability to keep their total loans significantly within the total allowed credit range - debt ratio. For example 20,000 in total credit available, 6,000 already used.
The key phrase here being “ongoing ability ” and “debt ratio”. Ongoing ability is why some older retired persons with otherwise good credit may sometimes have difficulty refinancing longer term loans. They are viewed as being possible risks because of the “ongoing income” requirement.
So from what we have seen here, the best Candidate is not just someone who has no defaults on their credit rating, such a person may get to 650 on the credit score but may not be able to get a credit score of 800 or more. It is expected that most people who have been working on improving their credit scores will have few defaults though not many. So the key issue for those looking to increase their credit scores from 600 to 800 leans more towards something else.
The absolute best candidate is someone with a favorable credit to debt ratio, meaning they have room to increase their debt, and has shown the long term ability to handle an ongoing balance. Note that balance does not mean not necessarily paying it off every month.
Who then are the loan arrangers really searching for? That would be the gentle person with a credit to debt ratio which is not only low, meaning they have room to increase it, but someone who also has shown the long term ability to handle an ongoing balance. Come to the site and view the Credit Score Video then make a few quick changes to fix your score. Is 72 hours too long?
Trying for a loan, Mtg or Lease. Increase your credit score first and get a better loan rate from your lender.
Related posts:
- Auto Loan Bad Credit score If you are
- Precisely What Do Credit Scores Necessarily mean What do cr
- Simple Guidelines When Getting A Bad Credit Car Finance In Phoenix If one is
- Simple Details About A Direct Deposit Payday Loan Looking at
- Facts About Credit Card Debt Credit car