What affects your credit score
Every bank has a credit scoring system. That is how they determine whether
to loan or not loan money to an individual or company.
The more you know about how credit is scores, the more you can build your
credit worthiness.
There are five important factors that affect how the lender might view
your acceptability for a loan:
- Your salary
- How long you have lived at the same address
- How long you've worked for the same employer
- You payment credit history
- You have a telephone in your name
Banks award points based on the criteria developed by their Credit Policy
Committee.
The criterion varies from bank to bank. Here's one example from a major bank:
- Present obligations past due : zero for �yes�, two points for �no�
- Total monthly payments compared to after tax income : zero points
are awarded if the comparison is 50% or higher, 40-49% receives 1 point,
30-39% receives two points and under 30% receives 3 points.
- Prior loans at any branch bank : zero for �no�, 2 points if he did
have a loan but it's closed and he had two or less eleven day notices
- Checking account at this bank: zero for none, 2 points if �yes� with
no rejected items in past year
- Length at present or previous address: zero for less than three years,
1 point for more
- Age of newest automobile : zero for over one year
- Savings account: zero points are awarded if Ned doesn't have a savings
account
- Own real estate: zero if none, three points if real estate is owned
- Telephone in own name: zero if none, 1 point if owns telephone
- Credit references: zero if none, 1 point if �yes�
Points equal the ability to get a loan. If you earn 75% of possible points
it is almost automatic that you'll get your loan if you have no negative
information on your credit report. At 50%-74% they consider you a risk which
equals higher interest rates and less than 50% requires review and potential
rejection.
If you've ever had a problem with credit you can get more facts and information
in the Credit Repair Tool Kit.
Get
the Credit Repair Tool Kit >> 
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