When you are looking to learn the insides of minds of lenders, do you really know how to do this? Would you like to get an inside track to the minds of lenders and banks? Who doesn't is the better question.
So, where do you start and who can you really believe when it comes time to learn what lenders want? Well, you start by finding the basic facts about credit.
Do you pay your bills and when do you pay them when you have debt to repay? Because, who ever is lending the cash, wants to know if they will get return payment as agreed upon.
Really, I wouldn't lend money to you if you was not going to return payment on a debt.
Nor, would anyone expect you do either.
So, to grasp this concept, look in the mirror and take a good look.
Once you have done this have a margarita and play some Buffet and it will be jolly in the morning...
No, get real, this is not the Caribbean and if anyone here really had that kind of money, it really wouldn't matter then would it? But really, this is true.
So, what else is lenders and banks wanting to see on your credit report to know that you will not default and not return payment? Well, they want to see first off, is the debtor stable and capable of maintaining employment long enough to repay the note.
The lenders view credit reports as a measuring stick to form beliefs about your ability to repay from.
They can find employment records out from a credit report.
Second, do you owe someone else money that will get their money before we would ask these lenders.
Well, this will also show up on your credit reports and be reflected in your FICO score.
Third, what kind of credit have you established? Lenders once again will be able to see your credit lines, or trade lines from other lenders and banks.
This is all thanks to the FICO scoring system and credit report.
The credit reports will reflect your past payment history for at least 10 years.
So, lets say you have a FICO Score of 693 +/- and you are applying for a new line of credit via a new credit card.
You are looking for a step up in revolving lines of credit to show you better managing your credit over a long period of time and the ability to manage an increase in credit for revolving accounts.
This will lower your risks with the credit provider on your next loan.
Say you need to get to a level of managed credit for a revolving account of about $2,000 when getting ready for your next major loan in about eighteen months.
Do you know that you still have 3 minor open collections that are unpaid because they will do more damage to your credit score then good if you are about to make a purchase? Well, it will also keep you from getting that new line of credit to prepare for your new mortgage loan down the road.
So wham, you now have to pay this measly $300 of total old collection debt just to get what you need.
Reason being is that your credit score, or FICO score is faulty with these left open.
Because the lender or credit issuer, is starting with your score as a beginning place and ending with the fact that the collections are still unpaid while you still took care of a solid 24 month payment history on another card that ends up being a better rate and higher credit limit then the one they give you after you apply for the one you thought was for you and you deserved after shopping various credit card offers and making the right moves.