Do Creditors Look Past Your Credit Score?

April 16th, 2017 | Author:

[Y]ou hear all about the minimum credit score needed to get a credit card or loan. It seems like this one magic number seals your fate. You wonder if creditors or lenders even look at the information in your credit report or if they just use that number to get a decision for your application.

Minimum Requirements

Most creditors have minimum requirements for approval. This includes a base credit score. For some, you must have a credit score above 650 or they won’t even consider you. Especially with home loans, the minimum credit score allowed is often a hard requirement, meaning there is no wiggle room for approval. However, meeting this requirement doesn’t mean you’ll automatically be approved. It is just a starting point.

A Detailed Look

Some creditors do automatic approvals or denials based on your credit score. Others will review your credit report even if you meet the minimum score requirement. They may have other requirements such as no charge-offs in the last 24 months or late payments in the past 12 months. Other creditors may question you on any negative information, allowing you a chance to explain.

Lenders may review your credit report even if you don’t meet the minimum credit score requirement. They will look for ways you can improve your credit so you can be approved. This happens mostly with home loans and some auto loans. Their goal is to gain a customer, so they want to show you how to be approved. They may even run a report that tells you how much you can expect to see your credit score improve if you take certain actions.

For example, a lender may tell you that you have a credit score of 585. However, if you can pay down your two credit cards that are maxed out, your credit score could be 625. This is not a guarantee, and they aren’t promising approval, but they give you a place to start working on improving your credit. Many times, these credit evaluations are very accurate and can help you rebuild your credit.

Newest Answers

What to Expect with VantageScore 4.0

May 22nd, 2017 | Author:
h

[V]antageScore announced it would have the latest version of its credit scoring model out for use sometime in the fall of 2017. Several updates expect to more accurately measure a person’s credit history. The Credit Balance One of the big changes in how balances on credit accounts will impact a person’s credit rating. Instead of […]

Continue Reading »

What to Consider with Annual Fee Credit Cards

May 19th, 2017 | Author:
h

[M]any credit cards come with an annual fee. In fact, people with bad credit often assume that’s the only kind of card they can qualify for. While it’s true that many cards have the fee, not all do. Before you apply for a card, you should consider the annual fee. Cards for Bad Credit A […]

Continue Reading »

How You Can Pay Off Your Mortgage Sooner

May 15th, 2017 | Author:
h

[T]he secret to financial independence and good credit is having enough money to live on and for emergencies. One way to ensure this is by reducing your debt. The biggest debt for many is with their home. A mortgage not only comes with a higher payment, but it is often set up for 30 years. […]

Continue Reading »

How to Protect Your Credit If You’re a Freelancer

May 3rd, 2017 | Author:
h

[B]ecoming a freelancer where you can work from home is a dream for many. It allows them the flexibility of making their schedule fit their life instead of working 9 to 5 and gives them the freedom to do what they want and be their own boss. However, it can also cost them financially if […]

Continue Reading »

The Basics of Budgeting

April 24th, 2017 | Author:
h

[W]hether you are just starting out on your own or just starting over, one of the most important things you can do is learn how to budget. Many people think they know how to budget, but they fail to stick with it. So, the goal is to not just create a budget, but to create […]

Continue Reading »

Revolving Credit or Installment Loans: Which is Better for Your Credit?

April 21st, 2017 | Author:
h

[I]f you’ve been learning about credit, one of the first things you’ll hear is you can’t get credit if you don’t have credit. It often seems to be a Catch-22; no one will give you credit so you can’t get established with a credit history so you can get new credit. With diligent effort, you […]

Continue Reading »

What to Do When a Landlord or Employer Asks to See Your Credit Report

April 19th, 2017 | Author:
h

[S]ometimes when you are filling out a rental or job application, you’ll come to a page that asks you to sign and authorize a credit check. Most people will sign it, hoping for the best if they have less than perfect credit. Even when you do sign it, you may wonder if that was the […]

Continue Reading »