| Most people with bad credit end up frustrated and | | | | runs into financial issues or real estate that can be |
| confused when they're applying to get a home | | | | used to repay the loan if the borrower defaults. |
| mortgage loan for the first time. Often after being | | | | How Do I Improve My Credit Score? |
| rejected once or twice, they come to the conclusion | | | | The first step to improving your credit score is to |
| that they're just not going to get a loan. Fortunately, | | | | understand the system. The system is very |
| with a little guidance, you can be well on your way to | | | | counter-intuitive: In other words, using common sense |
| being happily financed. | | | | can often get you into trouble. |
| The first step to getting your loan approved is | | | | For example, you might think paying off an old |
| preparation. Learn what criteria lenders use to approve | | | | delinquency before applying for your mortgage loan |
| of decline loans, including the three C's of credit and | | | | would be a good idea. Unfortunately, doing this will |
| your credit score. | | | | cause your credit score to plummet, costing your |
| What Are the Three C's of Credit? | | | | thousands of dollars in the long run or even ruining your |
| The three C's of credit are the criteria that lenders look | | | | chances at a loan. This is because a delinquency more |
| at when considering a loan. They are: | | | | than 24 months old has much less impact than a |
| Character: Background, honesty, and credit score of | | | | recently paid off delinquency. |
| the borrower. While credit score is a large part of the | | | | Just like how managing your credit improperly can |
| loan process, convincing the lender that you're | | | | have a large negative impact, by learning how credit |
| trustworthy can have a huge impact. | | | | works you can easily boost your credit dozens of |
| Capacity: Financial debts, income, and ratios of income | | | | points without actually changing your amount of debt. |
| to debt payments. How capable are you of repaying | | | | Learn to use the system three to nine months before |
| the loan, even if you wanted to? | | | | applying for your loan to get the maximum effect. |
| Capital: Savings that the borrower can dip into if he | | | | |