Sunday, November 14, 2010

Denied a Loan? Look to Your Credit and Income


A lender approves your loan based on the amount of risk you pose.  Your credit score is able to depict the amount of risk in a measurable number--the higher the score, the less risk you pose.  However, another component is how much money you have (assets) and how much money you make (income).

For example, if you have a high credit score (750 plus), but you only make $10 an hour part time and have $1000 in the bank, it's less than likely you'll be able to finance a car that costs more than $20,000.  To qualify, you'll need to put more money down or just end up getting a cheaper car.  The same concept holds true for home loans / mortgages.

Ultimately, it comes down to what you can afford AND your credit history.

38 comments:

  1. OH NOOO ADULLT STUF, My credit Score is going to be HUGE.

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  2. I never realized that income was factored in to such a large extent. I guess it makes sense... a bank wouldn't want to lend $1000000 to a guy that only makes 35,000 a year, even if he does have an awesome credit score.

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  3. Good post. Lots of truth in this article. There are a ton of people running around with lower credit scores but make 6 figures a year. These people are much more likely to get the loan with lower interest rates.

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  4. I still don't even know what my credit score is...

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  5. just got my credit score the other day. one of the scores was 808. pretty good huh?? =D anyway, nice post.

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  6. Money makes the world go round.

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  7. wow thanks i never was sure how that kinda thing worked

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  8. cool stuff, thanks for the info man,
    followin

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  9. If you cant pay for it outright, dont buy it.

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  10. I plan on moving into a foreclosed McMansion with a HOA. They'll just be glad someone is taking care of the house so they won't care if we're squatters. Banks usually let unsold foreclosed homes go to ruin and HOAs hate that :3

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  11. So many people are now spending out of your means!!

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  12. I remember trying to buy my own house at 22....well that didn't work out to well because of how much I had in the bank even though I made enough at the time to pay a mortgage monthly. I just spent to much at that age (all cash no credit cards) Only had a CC for emergencies.

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  13. my credit needs help this blawg is awesome

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  14. some people go out of control with high risk loans, namely payday loans, because they rarely require verification of income or credit checks. people take like 10 of them at the same time lol.

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  15. You could always go to family and friends too. :P

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  16. That's some useful info you got there!

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  17. Hmm... maybe i should get a cheaper car :D
    lol

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  18. i got a loan for a 50K car i only make $15/hr with a 5yr loan wonder what my score is...

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  19. Good advice. I'll keep that in mind.

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  20. thanks for that, rly helpful! :D

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