The content is accurate at the time of publication and is subject to change.
In these times of crisis, one of man's ultimate refuges is to borrow money from financial entities in order to cope with the requisites of daily survival. As a consumer, man applies for credit accounts in order to temporarily ease out his need for financial assistance. At some point, it is not all the time that applications are approved because lenders are considering several factors before letting their money go to your pocket.
Getting approved for a loan application all depends on your credit history. It is important that a loan applicant has credit history because the said record is necessary for financial institutions to gauge your credit worthiness. Only those first time applicants cannot show a history of their financial transactions. Those whose records show no delinquencies and pending debts are more capable of gabbing a credit opportunity. The length of credit records bear much of the computation of the FICO scores of the applicant. The higher the scores mean the more chances for the applicant to be approved and to get loans and mortgages for lower interest rates.
FICO ratings are important in determining how high or how low the interest will be entailed in your application. For instance, a consumer with 720 score is more likely to grab a thirty-year mortgage with only 5.5 percent interest. On the other hand, a consumer who gets 580 FICO ratings will have the chance to pay 8.5 percent interest or higher. There is a three full percentage difference in the awarded interest rates and FICO ratings are reasons for such difference.
Nobody would want to be given high interest rates; that is why it is important that a consumer should not just settle in having a credit history but should also see to it that the history is impressive enough to show off your credibility and your ability to pay your financial obligations. Once you made a good mark in the credit market, it is expected that the trust given to you by lenders will go on not until you tarnish it with irresponsibility. The key to flourishing in the credit world is to stand for whatever you have consumed and be firm in paying such regularly and on time.
Thirty five percent of your FICO score is your payment history. Delinquencies and missing payments should be ironed out with the respective merchants so that items will be deleted from the record and ratings will soar high.
