Your credit score – the first glance
Whether you apply for your loan online or in person, the first place the bank will look is your credit score. This simple number works like your old grade point average in school. If you had a high GPA, you had good grades. If you had a low GPA, you had bad grades. Credit scores work similarly, giving a high-level view into your credit before digging into the details.
Your history of payments – credit history
A 30-day late payment or two wasn’t a big deal, but 90 day late payments were. A pattern of late payments was enough to disqualify an application, even if they met credit score requirements.
Your ability to pay – debt to income
At this point, the credit review was essentially done, and my focus shifted to the applicant’s outstanding debt, income, and ability to pay for the loan. By reviewing the credit report, I knew at this point that the borrower was responsible with past loans and shows the habits of making on-time payments, but that doesn’t mean they can afford the new loan they want today.