This is the third post in a blog series about what your lender will look for as they evaluate your credit score analysis. So far, we’ve covered Part 1 and Part 2.
Your Credit Score Analysis – Your Outstanding Debt
The second major piece of data that a lender will look at is your present outstanding debt. Lenders want to be sure that the amount of credit you are applying for is something that you are able to pay back. If you have a large amount of outstanding debt, it can be a red flag for lenders that you may have trouble paying back any additional debts granted. So, the lower your outstanding debt, the better your chances for getting credit.
Credit History Length
The length of your credit history accounts for 15% of your credit score analysis. If your track record for making payments on-time and being a responsible borrower is a good one, it tells lenders that you can cover your obligations, making it more likely that they will grant you a loan. Another factor that plays a role in this category is how often you make use of your credit cards. Having them and hardly using them gives lenders nothing to work with when deciding if you are a good or bad borrower. Using them too often and always have a balance of 50% of more can also make things look bad for you.
Read Part 4 in my blog series on how lenders interpret your credit score analysis.
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