If you are going to petition a line of credit, good planning is essential if you want to receive the desired response. To help you in this regard, this article will give you some pointers as to what determines a positive or negative response to an application for a line of credit.
With underwriting, there are three main factors which come into play. The first factor is your debt to income ratio. With this, the underwriters will look at all of your debts on your credit report and what the minimum monthly payments are. This is listed on the credit report for every credit account you currently have which is open.
Although your housing expenses may not be part of your credit report, they are still of great interest to the underwriters. Although there is no set rule as to a good debt to income ratio, it is commonly recognized that it shouldn't surpass forty percent of your earnings.
The second factor to consider is your credit score. You want to have a good credit score and a score over 700 is usually considered a strong score.
Factors which go into your credit score include whether your outstanding balances on your credit cards exceed 50% of the credit limit and other information such as collections, bankruptcy, and judgments which can appear against you
The third factor which goes into play is how long you have been living at your residence and been at your current job. These two pieces of information can determine whether you have stability.
Underwriters are more willing to lend to people with good stability because there is less of a credit risk. The third factor is not as important as your ability to repay and your credit history.
These pointers will help you to understand how a request for a line of credit is analyzed.
With underwriting, there are three main factors which come into play. The first factor is your debt to income ratio. With this, the underwriters will look at all of your debts on your credit report and what the minimum monthly payments are. This is listed on the credit report for every credit account you currently have which is open.
Although your housing expenses may not be part of your credit report, they are still of great interest to the underwriters. Although there is no set rule as to a good debt to income ratio, it is commonly recognized that it shouldn't surpass forty percent of your earnings.
The second factor to consider is your credit score. You want to have a good credit score and a score over 700 is usually considered a strong score.
Factors which go into your credit score include whether your outstanding balances on your credit cards exceed 50% of the credit limit and other information such as collections, bankruptcy, and judgments which can appear against you
The third factor which goes into play is how long you have been living at your residence and been at your current job. These two pieces of information can determine whether you have stability.
Underwriters are more willing to lend to people with good stability because there is less of a credit risk. The third factor is not as important as your ability to repay and your credit history.
These pointers will help you to understand how a request for a line of credit is analyzed.
About the Author:
Tire of struggling to keep up with your credit card balances? Learn how to deal with excessive credit card debt on the Debtopedia website. Get a free copy of my report "Secrets Of Credit Card Debt" at http://www.debtopedia.com
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