Posts Tagged ‘credit lenders’
Buy Now Pay Later No Credit Check
Credit Lenders
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Lenders and Credit: How creditors and lenders look at your credit score: Credit scores are one of the first thing that a potential credit card company or lender is going to look at when you submit a credit application (for any form of credit). As previously discussed your credit report based on your history as reported by the creditors and merchants you deal or have dealt with. In this article we’ll discuss what a potential lender will look at in determining your credit worthiness. Note that not all lenders have the same criteria or process. It is possible to (shall we say) be declined for an American Express card through an online credit card application and be approved for the same card through you bank because of a previous relationship. We will alsotouch on private bad credit lenders and the world of buy now, pay later with no credit checks.
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The following is a brief insight into how a potential lender interrupts your credit information via your credit report. Note: when applying for credit it is best to apply with a financial institution that you have a relationship with (checking account etc.)
Debt to income ratio:
One of the major factors in determining your credit worthiness is your debt to income ratio. Your debt to income ratio is a calculation based amount you make per year compared to the amount of debt you have and the minimum payments due each month. If you have debt ratio of 35% or higher, chances are you will not be approved for credit. Even at 20% some creditors may deny your application, others however may approve but charge you a high interest rate. Typically credit card debt is the worst form of debt where as a mortgage or car loan is still considered equity which works in your favour. In order to improve your chances for credit, either lower the amount of debt you have (pay it off, consolidate) or increase the amount of income you generate. As a rule lenders look favourably on a higher income, lower debt ratio and will give you a much better rate.
Available and Open credit:
So you managed to pay off your credit cards, YES! To the average person that would be enough. However so long as you have the ability to use that credit a lender will simply assume the amount that the card is entitled to as debt. It may seem unfair however, lender do this as a precaution. With to much readily available credit at your disposal it would be very easy to land yourself in over your head.
As a side note:
The CRA suggests that you hold on to your oldest credit card or credit product (revolving) as it has the most amount of history (hopefully all good). Don’t worry if you have more than a few credit cards, so long as you are able to pay them off; it actually reflect positively towards a healthy credit score. Do close the accounts and cards that you no longer use, as the more you have "laying around" the more likely you are to become a victim of Identify Theft (Please, don’t just cut up the card! Phone or go in and close the account in person).
The Balance on your Credit Cards:
If you have maxed out your credit cards it tells the lender that you need more money as you can’t afford to bring down the balance of your other credit cards…..not good. It should be standard practice to keep at least 25% of the amount the card is worth available at all times. You may consider getting rid ofdebt by consolidation.
Payment History:
It should go without saying that you must be making your minimum payments on time constantly (it is of course even better if you can pay more than what is due). Anytime you miss or forget about a payment it stains your credit report for at least 12 months for soft inquires and show up front and center in a full credit inquire. If at anytime you account is sent to a collections agency it stays on file for seven years and is a very bad sign to potential lenders.
Inquiries:
As you have read in the previous articles, every time you submit an application for a credit product the creditor will pull up your commerial credit report. This is called a hard inquire as the full report is being accessed by someone other than yourself. When you request you credit report nothing happens other than the fact that you get some peace of mind. Other inquires know as soft inquires may occur when you open a bank account or get a prequalification for a loan (like a mortgage). Anything more than 10 soft inquires or 5 hard in a period of 6 months or less will typically scare most lenders away.
Now that you have a better understanding of how a creditor will look at your credit report you should have an easier time with any future applications.
Buy Now Pay Later with No Credit Check:
Now when it comes down to buy now pay later no credit check, don’t be fooled! These places may not check your credit rating but they are going to charge you through the roof for it. Typically you’re looking at anywhere from 29-45% interest or higher. So basically when looking at catalogs with instant credit anything or free gift credit card etc, you order you will land up by paying almost three times the amount of the price….ouch.
Private Bad Credit Lenders:
First thing that should come to mind is a mob like loan shark…. in reality this is not often too far off. Be very careful before ever going to a private bad credit lender, you land up biting off more than you can chew.
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