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

Get a Better Credit Score in 2017

January 22nd, 2018 | Author:
h

[I]f you have a goal to improve your credit score for the new year, you need to set up steps to help you achieve this goal. For many, they read all kinds of information about how to get a good credit score, and it can be overwhelming. Sometimes, it can sound so easy but not […]

Continue Reading »

Why You Need to Check All Three Credit Reports

January 19th, 2018 | Author:
h

[T]here are three major credit reporting agencies: Experian, Equifax and TransUnion. All of them provide a credit report which lists your personal information and credit accounts. You can get one report for free each year or purchase extra reports through the agency sites. Many people just get one credit report, but you really should get […]

Continue Reading »

What is the Right Amount for a Credit Limit?

January 18th, 2018 | Author:
h

[A]s you get credit cards, you will notice they give you a credit limit. This is the maximum amount you can spend on the card without paying some of it off first. Credit card companies often increase your credit limit as you prove responsible handling the amount you have. You may wonder if more credit […]

Continue Reading »

Buying a Car with Bad Credit

January 12th, 2018 | Author:
h

[I]f you have bad credit, it can be difficult to qualify for a car loan. However, it’s not impossible. Before you go out and apply for money to purchase a vehicle, there are some things you should know. Check Your Credit Before you fill out any applications for car loans, you need to take a […]

Continue Reading »

What Does No Credit Mean?

January 10th, 2018 | Author:
h

[M]any people hear that they have bad credit, which means they haven’t always been responsible with their credit accounts. However, it is another situation entirely when a person is told they have no credit. You may wonder how that’s possible and what it really means for your future. No Credit Doesn’t Mean Never Any Credit […]

Continue Reading »

What You Need to Know about TransUnion

January 8th, 2018 | Author:
h

[T]ransUnion is one of the three credit bureaus which stores information about consumers and their credit history. It provides this information to creditors and to consumers. TransUnion was founded in 1968, and it now has more than 200 offices through the US and the world. How TransUnion is Different TransUnion is similar to the other […]

Continue Reading »

What You Should Know about Equifax

January 5th, 2018 | Author:
h

[E]quifax is one of the three major credit reporting agencies which provides information used on your credit report. It has a credit score which will impact your ability to get approved for new credit. All of these agencies aren’t the same, so here is some information you should know about Equifax. Equifax is headquartered out […]

Continue Reading »