- How long have been employed (either at the same job or in the same line of work)? Do you have stable income?
- Have you moved frequently? Too many moves may lead the creditor/lender to believe that you have been evicted and/or are financially irresponsible.
- Do you own a home or are you renting an apartment? Owning a home has traditionally been thought to indicate stability and “having roots in the community.”
- Do you have money in the bank (in savings and checking accounts)? Having established and maintained a savings account will provide the lender with proof that you have managed your finances responsibly and that you have been able to “set money aside.” Also, use your checking account wisely.
It is very important to obtain a copy of your credit report and carefully examine it for accuracy at least once a year. Any errors, such as incorrect name spelling, Social Security number, account numbers, loan balances, etc., should be reported to the credit reporting agency.
If you have a common name, it is especially important to make sure that items such as negative public records or accounts not belonging to you, are not listed on the report.
There may be a small charge to get your report. However, there is no charge to obtain your credit report if you are denied credit due to your credit history.
Always, always, always pay your bills on time. Failure to pay bills on time, before the due date, is the number one factor that negatively affects your credit. Despite this, people commonly believe that paying a few days late, or skipping a month and then paying a payment extra the next, or catching up every once in a while is acceptable. It is not! Every time a payment is made late, you run the risk of the creditor or lender reporting the late payment to the credit reporting agency.
What if you have a “good reason” for paying late, such as, “I lost my job?” The payment is still due on time. In the event of a crisis, however, immediately contact the creditor or lender to notify them of your situation. This type of communication will go a long way and may, in a short-term crisis, secure you a short-term “grace period.” Never, however, assume that these types of agreements or negotiations are “automatic.”
Additionally, you can request that a note be put in your credit report file indicating the “good reason” for being late on payments. This does not, however, remove the negative entry from your credit report, but simply provides an explanation.
Tip on making a payment late: if you happen to forget to pay a bill on time (before the due date), be sure to immediately pay it. Although you may have to pay a late fee and interest, many creditors do not report to the credit reporting agency until a payment is 30 days late.
