So, what happens on the other side of the door? You know, while you’ve went to a car dealership, applied for a loan online or anytime you are waiting for someone to run your credit and make the approval decision for your loan.

First your personal information will be pulled and placed into a system that will scan and analyze your credit report. Then it will provide the creditor some feedback based on your score and general items on whether you should be approved.  This system will analyze items such as credit scores from Equifax, Transunion and Experian, the number or accounts, how many are delinquent accounts, how long have you had the accounts open, how many late payments and your debt to income ratio based on the income information you decided.

Depending on where you apply would determine if an automated decision will be the final factor for you.  However, some creditors will take the next step, put human eyes on your credit report and begin to discuss with the finance manager if there are things that must be considered. You wondered while the salesman was probing? he was trying to get to know a few things about you to include in that “credit conversation.” Quick insert: If you have bad credit, please don’t be nasty and rude to the salesman. His opinion of you might play a part in whether the lender wants to work with you or not if your credit is already bad.

So, on the other side of the door they take a deeper look into the credit report with human eyes to determine, did it all go bad at the same time? Did a life event bring about this problem such as job loss or relocation?  Someone may even come sit with you to ask additional questions about your credit report. Trust me, I know because I am the guy that has sat across on both sides of the table. Once with bad credit and later to ask the questions.

Here are some tips before applying.

Know your credit situation:

  1. Know where you stand: Pull your credit report, know your scores and what is helping or hurting on your report and be ready to talk about it. Hopefully you are working on a plan to resolve any issues.
  2. Prepare mentally: If you have bad credit, prepare yourself for the result and remember that NO could mean, Not until a few things are fixed on your credit report. Meaning negative items removed or paid.
  3. Decrease some Debt: Pay down all credit card balances to less than 30% of use and wait for this to reflect on your report before applying for any credit.
  4. Understand that it may be best to struggle a little while longer and commit to getting your credit improved before even walking into to submit an application.

No matter where you stand in the credit world, know that you have or can take control of your credit situation. It may take some time and it is a process but by educating yourself, understanding how credit works and develop certain financial disciplines you can change how you experience as you sit on the consumer’s side of this process.

If you or someone you know has less than perfect credit. Let’s talk. Give me a call at (919)904-6960 or email me at aquilacarmon06@gmail.com. Go to www.myfes.net\acarmon1.  I am connected with a team that can help.

Aquila T Carmon

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