credit report - 3 Quick Ways a Mortgage Lender Views You

Basics Lenders look at very basic factors about you, including: Credit score Your income Total debt obligations Your Credit Your credit score is a basic measure that lenders will use. Mortgage lenders will usually require different minimum credit scores for different kinds of loans. The credit criterion a lender will use for 100% financing will likely be mores strict than for a loan where the borrower makes a 20% down payment. You usually have three different credit scores - one from each credit bureau. The middle credit score is the "mid score" and this is usually the one the lender uses to evaluate you. Your Income This is a combination of your current earnings, your job stability, your job type, and your years of experience in a given field. A person with 10 years of experience as a carpenter with stable, rising income may be viewed more favorably than a person who has six months experience on their first job. A borrower's income needs to be higher enough to be able to pay their mortgage. Your Total Debt Your total monthly debt to a mortgage lender is calculated as: Monthly credit card, auto, and other debt payments The monthly payment on your new mortgage if you are approved The lender will figure out your current debt load from your credit report. They will also calculate your monthly payment on your new mortgage at the rate they will offer you. Usually lenders do not want a borrower's total monthly debt payments to exceed around 40% of a borrower's pre-tax income. Some lenders will go to 50% or more. For example, a borrower whose monthly pretax income is $10,000 with a $2,500 per month debt load will have a debt/income ratio of 25%. Summary These are basic factors a mortgage lender will consider. Although a mortgage lender will consider many other factors, these are the basic factors that will be the most important to their decision. It is important to clean up your credit report (if it has any errors) in advance of your application. Get Mortgage Rates, 25+ Free Mortgage Calculators, Mortgage Quick Tips and Much More Bad Credit Advisor Credit Card Advisor Article Source:http://EzineArticles.com/?expert=Ben_Afzal credit report - Credit Card Application Turned Down? Here's What To Do About It If you've ever applied for a credit card at any point in your life, then chances are you may have received a rejection letter at some point. This can be a big let down for most people, especially if the credit card was the perfect deal for you. But instead of feeling down about it, what can you do to rectify this frustrating situation? What can you do to get your credit card application accepted, when all you ever see is rejection letters? This is what I'm going to help you with today. Your main priority when you first receive your rejection letter is to read it through carefully. Often, the rejection letter will state the reasons why you've been turned down. Hopefully it will contain the exact reasons why you've been refused, although sometimes it will simple tell you how to find out the reasons. If you have been refused due to a poor credit rating, then you should be able to find the contact details of the credit reporting agency that your credit card company used. If the refusal letter didn't clearly state why you've been rejected, then feel free to contact the credit card company to ask for reasons why you've been turned down. This information will help you in your future credit card applications. The most common reasons are usually do to with not having a high enough income to meet the credit card company's minimum requirement or not being in your current job for long enough. Sometimes you can be turned down because of the credit reporting company having incorrect information. As unlikely as this sounds, it can be quite common for the credit reporting company to have the wrong information. In this case, you should request your credit report from the credit reporting company that your credit card company contacted. This shouldn't cost you anything if you've had an application turned down, as they credit reporting company has to give you a free copy by law, if you've had a rejected application due to information they gave. When your credit report arrives, check it for accuracy. If you find anything that's incorrect, then you will need to find some proof to give to the credit reporting company, to prove that they are wrong. Once you've done this, they should update your credit report to show the truth. If you get turned down for a credit card application, then it's not the end of the world. But it's important that you find out WHY you've been turned down, before you just start applying for lots of different cards. Why? Because if you keep getting rejections, it can effect your credit score in a negative way, and that is something you want to avoid at all costs.