With so much talk of the credit crunch, most people are aware that qualifying for financing of any kind is becoming more and more difficult. Banks and lenders are going out of business on what seems like a weekly basis and those that are left standing are requiring more stringent underwriting criteria. While you certainly need an above average credit score, this is not enough. We will be looking at some of the other factors that impact your ability to get credit.
Income
After your credit history, your debt to income ratio is the second most important thing that impacts your chances of being approved for a loan. While every lender has different criteria, the key thing to keep in mind is that you need to keep your overall debt level low.
Job Time
How long you have been on your job is viewed as a good indicator of your personal stability. Ideally, you want to have at least two years in the same line of work. The only types of job changes that are looked upon favorability are ones that are in the same line of work made for career advancement.
Citizenship
Loans for Foreign Nationals were once fairly easy to come by as long as you had a limited or clean credit history. Yes, they required a slightly larger down payment, but provided you had this you could still get a loan at a fairly reasonable interest rate. Due to the credit market implosion, loans for non-citizens are almost impossible to find.
Bank Accounts
Having a bank account is an important criteria that almost every lender has. Ideally, you will have both a checking and savings account. Unless you have a bank account that has been charged off, your bank accounts will not appear in your credit report. For this reason, the fact that you have banking relationships is more important than how you have handled the accounts. The exception to this would be when applying for a mortgage. Be prepared to do some explaining if you have some bounced checks in the bank statement that you are required to provide.