Good Credit is the Most Important Measure
Great credit is key to getting good loans. In this market where lending is tight and money isn’t freely flowing, the only way to get someone to lend you money is with good credit. Here are a few ways to achieve this.
Credit monitoring services like ones from myFICO is very good because it automatically keeps track of your credit report and alerts you whenever there are any changes. You can of course choose to do it yourself but that’s 1000x harder.
Of course, there’s always the free credit report that you can get from each of the three credit report agencies per year. To maximize the benefit, separate the time that you get the reports. For example, get one in January, then another one in May and another one in September so you are on top of your credit.
Lenders will just pull your report when you request a loan, so if you are maxed out on your credit, they see it as a no-no. It doesn’t really matter if you pay off your credit cards every month because the utilization rate will be very high.
Every time you apply for credit, they will ding your credit report. If there are too many within a short period of time, the score will be affected because no one with a good financial picture will keep apply for credit. If it’s not absolutely necessary, space out your applications so it doesn’t look suspicious!
Use all your credit cards because having cards canceled on you is not a good sign that you are a good borrower. This will in turn lower your score.
In general, having 5 cards or more is a good way to make sure lenders see you as a person that is able to handle debt and pay them off. If you only have one card and no other debt, it’s hard for companies to see whether you have the ability to pay bills on a timely manner and they will be hesitate to lend you money.
Even though too much debt will curtail the total amount that you can borrow, having them will help increase the chances that you will get approved because lenders know that someone who have multiple forms of debt are used to paying them and won’t freak out when the bills arrive in the mail.
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