While it isn’t a perfect method and can overlook some components, it generally provides an accurate enough look into your relationship with your credit cards and with your credit card payments.ĭo you pay your credit card bills on time? Are you overspending on your credit card? Have you been forced to file for bankruptcy before? These are all possible factors in determining your credit score. But, if you’re applying for housing and are worried about your credit score getting in the way, remember that other factors are taken into consideration aside from just your credit score.Ĭredit scores provide a window into your financial affairs. Sure, you should try to improve your credit score as soon as you can. So just because your credit score might be lower, don’t let that get you down. This is a great way to see if a customer will have the money in the immediate future to pay back whatever the loan might be. This will compare the amount of revenue that you make with your monthly debt payments. Lenders and banks will also commonly look at your debt to income ratio. Whatever your credit score may be, there are other factors that are considered other than credit score. Maybe they’ll combine that with your age and see that you haven’t had a ton of time yet to grow your credit score. They might look at your level of income and make a determination of your reliability in that way. If your credit score isn’t great, there are still other things that banks and lenders take into consideration. If they see a low credit score tied to you, they might think that you don’t have the ability to pay back the loan that they will give you. Low credit scores reflect your past ability to pay back credit payments. You’ll most likely be seen as less reliable than those with positive credit scores because of your history with making payments back in a timely manner, if at all. Bad or lower credit scores can increase your interest rates and hurt your chances of getting approved for certain housing or loans.
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