Credit Status Is Paramount

Your credit status can make or break your chances should you find yourself in the position of needing to apply for a loan. That one little number that is your credit score will tell a potential lender whether you are a first-rate applicant for a loan or whether they should be concerned about your ability to repay the money you borrow. Generally, your credit status ranges from 375 to 900, with 900 being “first class” and 375 being “unacceptable”. Most of us have a credit status that falls somewhere in the 600’s.

Many things are considered when a credit status is being calculated. The two biggest factors are how much debt you are already carrying and your payment history. These two factors carry around 65% of the weight in most credit status calculations. So if you have an opportunity, it is a good idea to pay down some of your existing debt before making a new loan application. You can not do much to change your credit history, but it is always a good idea to obtain a free copy of your credit report a few months before making a loan application in order to correct any mistakes or clear up any misunderstandings that might have occurred in your records. Getting your credit report cleaned up ahead of time will improve your credit status and your chances for getting a loan.

Your credit status is negatively impacted by any collection action that may have been taken against you. Not paying your bills on time also hurts your credit status, as can the number of credit cards you have and what you have applied for recently.

Since your credit status speaks volumes to lenders, it should be a priority of yours too. Knowing your credit status before going into the loan process gives you some idea of how good your chances are to be approved.