Debt ratio is not a good indicator of what you can or can’t afford. The front ratio is simply a percentage derived from dividing your mortgage payment (PITI) by your Gross Paycheck.
Online payday loan lenders do not look at your credit score, but they are one of a very few who do not. Keeping your score high is a struggle for many. When you understand what makes a good score it will be easier to make it all work. Some people think that you have to have high income in order to have good credit. How much you make is not a factor in your credit score at all. There is a comparison of income to debt included with some creditors’ view towards new debt applications.
The length of credit – How long you have had your accounts open for will be used for up to 15% of the score. Keep the accounts active for a positive effect on your credit score. you do not need to have unpaid balances, but use the card every now and then and pay it off quickly. Cancelling unused accounts can hurt your credit.
On the debt side of the equation, usually only debts that are reported on your credit report are counted against your debt ratio. That means, for example, your car insurance payments or your gym memberships aren’t taken into account. As well, many utility companies, such as electrical, gas, and water, will report your monthly payments on your credit report. However, utility bills and cell phone bills are usually not counted against debt ratio, even if they are on the credit report. In any case, debt ratio is not a good indication of your debt levels.
3) Loan To Value (LTV or CLTV) This is a personal loan revolving or installment a measurement of how far into the value of the home you expect the lender loan. For example a $100,000 house with an $80,000 loan amount is 80% loan to value or LTV. I was looking for is a personal loan revolving or installment on the web and and hundreds of others popped up. We get this value by dividing the PRESENT value or sales price by the ACTUAL loan amount (PV/ LA = LTV). When you begin to go over 80% loan to value you are asking the lender to bear more risk, be prepared to pay more in the long run should you refinance or purchase above this LTV. Foreclosures happen most often on homes with less than 20% equity, and the banks know this.
10 percent of your score is based on the number of inquiries on your report. If you’ve applied for numerous credit cards or loans, you will have many inquiries on your credit report. Generally, these are bad for your score because they mean you may be in some kind of financial trouble or your accumulating large amounts of debt. The more recent these inquiries are, the lower your overall credit score. If the inquiries are older than a year they won’t be counted in your FICO score.
If you have issues on your credit report you need to fix, just tackle them one at a time. It’s best to apply the lessons you’ve learned in how to improve your credit score by picking an issue and sticking with it until it’s paid off. Most credit counselors will advise you to learn how to improve your credit by paying down the smallest obligations first and then applying the money spent on them on the next largest debt until a score is improved.
Once you know that you will need to take out a loan, start shopping around. Terms can vary and you want to find the best rate possible. Call around and talk to all the banks in your area, plus some national lenders. Don’t just go to a payday lender, talk with your bank or credit union first.
Be careful, though. Look for a card with a low or nonexistent annual fee and low interest rates. For now, just get one: Opening a slew of credit accounts in a short period of time can make you look like a risky customer.
It was once a myth that you need a balance to have good credit. This is not really the case. You do not really have to have that aspect. If you have a card, you can get started with building up your scores. If you do not qualify for a card, consider the security card. The banks offer card lines that will equal the deposit that you made. Get a card that reports on the 3 credit bureaus. There are a number of top brands offering security cards. Check the requirements and see if it works best for you and your aim to build your score.
Secured Credit Card – These types of credit cards, are usually used with people that have little or no credit established. These don’t hold quite as much weight as an unsecured credit card, but are still effective at building a credit file. They will typically require a cash deposit that will secure the credit card to protect against a default of payments. Some secured credit cards will also require an application fee that is separate from the cash deposit to secure the card.