Why Do I Have Credit Problems?

Why Do I Have Credit Problems?


Why is it that some lenders say “no” when others say “yes”?  Here is why – all lenders make a judgment about:


·         character (your willingness to repay)


·         capacity (your ability to pay)


·         collateral (the value of what you are buying)



Several tools aid lenders in making this judgment, including automated credit or risk scores. In some cases, these scores replace human decision-making. As a result, separate lenders can look at the same loan and view the same credit risk differently.


If your loan application met with “no” at one lender, there may be another lender out there whose credit risk criteria is different.  If so, they may have a loan for you. 


But be prepared to sign on the dotted line for a “higher than usual” interest rate.  The more of a risk you present to the lender, the higher the annual interest rate.



Your thoughts on this subject?  Your comments appreciated!

Content © Rich Brott, 2011

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