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Most people will take out some type of loan at some point in there life. They are often necessary to buy a house, buy a car, or start a business. Getting a loan isn't an easy process, and it often has a few road blocks.
When you are ready to get a loan, you will go to a lender and ask them to lend you money. They are not instantly going to grant you a loan, you have to apply for it. It's kind of like getting a job. You apply for a loan hoping they will give you the money just as when you apply for a job hoping they give you a job.
Several aspects of your life come under the radar in the loan decision making process. You need to make enough money to pay it back. They're not going to lend $1,000,000 to someone who makes $20,000 a year because they know they won't be able to make the payments. They also look at your credit history. With excellent credit, you have a good chance of getting the loan. As your credit history gets worse, the chances of you getting the loan gets worse.
It's important that you are sure you have good credit even before you apply for a loan. Good credit history can be achieved by having a good track record with credit. Always pay all your bills on time. This proves to lenders that you will pay them back and that you are trustworthy.
Excellent credit isn't absolutely necessary to get a loan, but if you want a low rate, it is. If you have good credit, but not very good or excellent credit, they will grant you a loan, but they will raise the interest rate in order to lower their risk. They want to be sure that they are paid back, so they raise the rate, just in case you don't.
With any investment, the less likely you will get back your money, the riskier it is. The same goes with other lenders. The worse your credit is the more risk they are taking by lending you money.
If you really want to make sure your credit is good, you should get a copy of your credit reports. A credit report lists your entire credit history. There are three bureaus that each make a credit report, and you are entitled to one free copy of each every year.
Check your credit report frequently also to make sure there aren't any mistakes. If you find mistakes, contact the credit bureau who issued the report and get it fixed right away.
When you are ready to get a loan, you will go to a lender and ask them to lend you money. They are not instantly going to grant you a loan, you have to apply for it. It's kind of like getting a job. You apply for a loan hoping they will give you the money just as when you apply for a job hoping they give you a job.
Several aspects of your life come under the radar in the loan decision making process. You need to make enough money to pay it back. They're not going to lend $1,000,000 to someone who makes $20,000 a year because they know they won't be able to make the payments. They also look at your credit history. With excellent credit, you have a good chance of getting the loan. As your credit history gets worse, the chances of you getting the loan gets worse.
It's important that you are sure you have good credit even before you apply for a loan. Good credit history can be achieved by having a good track record with credit. Always pay all your bills on time. This proves to lenders that you will pay them back and that you are trustworthy.
Excellent credit isn't absolutely necessary to get a loan, but if you want a low rate, it is. If you have good credit, but not very good or excellent credit, they will grant you a loan, but they will raise the interest rate in order to lower their risk. They want to be sure that they are paid back, so they raise the rate, just in case you don't.
With any investment, the less likely you will get back your money, the riskier it is. The same goes with other lenders. The worse your credit is the more risk they are taking by lending you money.
If you really want to make sure your credit is good, you should get a copy of your credit reports. A credit report lists your entire credit history. There are three bureaus that each make a credit report, and you are entitled to one free copy of each every year.
Check your credit report frequently also to make sure there aren't any mistakes. If you find mistakes, contact the credit bureau who issued the report and get it fixed right away.
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Do you need a credit report? Get an absolutely free credit report and check to see how your credit is. Always pay all your bills and improve your credit.
posted by Credit Counseling at
7:33 AM
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