What Creditors Look at on Credit Reports

April 14th, 2017 | Author:

[T]here’s a lot of information on a credit report. If you’ve ever requested a free copy of your credit report, you may have been overwhelmed at all of the stuff on there. It makes you wonder what creditors and lenders really look at. Do they read every line or do they skim? If they skim, what are they looking for?

First Impressions

When a lender or creditor looks at your report, their first impression may be based on the size of it. A small credit report with only one or two items says you haven’t had a lot of credit or for very long. While this may not be a bad thing, it can make creditors worry about whether you can handle the responsibility that comes from having credit. This is one reason some creditors will deny you based on insufficient credit history.

Someone with a long list of accounts may also be a red flag. If they have closed accounts or have a lot of charged-off accounts or even just carry a lot of open credit accounts, it can mean too much risk for lenders.

Negative Information

For those creditors who just skim the report, they are going to focus on any negative information. They will look for late payments and charge-offs. They will look at these items in detail. The lenders will notice how old the accounts are and how many late payments you had. They will base their approval or denial on this data for the most part.

Recent Information

Some creditors look only at what you’ve done in the last two years. They won’t pay any attention to anything older than that. However, they may scrutinize the information within the past two years to see if you’ve handled credit with no problems. They may look at your credit balances even if you have no negative information.

Each creditor has their own system for reviewing credit reports. Just because one creditor turns you down based on specific information, it doesn’t mean every creditor will look at your report the same way.

Newest Answers

3 Mistakes People Make When Trying to Improve Bad Credit

July 17th, 2017 | Author:

[Y]ou get a lot of advice when you research online about how to improve bad credit. Some of it is not so good, a waste of time or worse. There are three major mistakes that people make when they are trying to rebuild their credit rating. Mistake #1 – Hiring a Credit Repair Company You’ll […]

Continue Reading »

4 Steps to Improve Your Credit

July 14th, 2017 | Author:

[F]or people with bad credit, they are often looking for the easiest or best ways to improve their credit scores. While the quick-fix schemes promised by some companies don’t really work, there are some steps you can take on your own. You won’t see an improvement overnight, but your credit score will climb over time. […]

Continue Reading »

Why Credit Scores Matter and What They Mean

July 13th, 2017 | Author:

[Y]ou hear a lot about credit scores when you’re applying for a loan or credit card. You may also hear about good credit and bad credit when you get insurance or rent a vehicle or apartment. With all of this hype about credit scores, why do they matter so much? A Picture of a Moment […]

Continue Reading »

The Basics of a Credit Report

July 12th, 2017 | Author:

[I]f you’ve been researching about how to improve your credit, you’ve probably read about credit reports. Many times, articles and other information assumes you know what a credit report is and how it looks. For those without that knowledge, here are the basics. What Is a Credit Report? It’s a list of all of your […]

Continue Reading »

3 Ways to Get an Emergency Fund Fast

July 9th, 2017 | Author:

[T]he car broke down and the mechanic says it will cost $300 to fix it. It may not sound like much money, but for many people it means they can’t pay another bill. The reason is they don’t have an emergency fund, which can help them pay unexpected bills and protect their credit rating. An […]

Continue Reading »

3 Things You Need to Understand about an Emergency Fund

July 7th, 2017 | Author:

An emergency fund is something every adult should have. It provides funds to have on hand in case an unexpected expense comes up. It may be a car repair, sick person, home repair or other expense that you didn’t budget in. Many people try to build an emergency fund but fail. Here are three things […]

Continue Reading »

Should You Get Debt Counseling Help?

July 5th, 2017 | Author:

You’ve probably seen the ads for debt counselors, promising to help you get out of debt and improve your credit score. You may wonder if they can help you and if you should find a company to begin working on improving your credit score. Who Needs Debt Counselors First, you need to understand that many […]

Continue Reading »