Your Credit Score Isn’t All it’s Made Up to Be
Your credit score is important, but other factors matter, too!
You put good in and you get good out. When it comes to increasing your credit score, putting good in means making your payments on time! You take on some secured or unsecured debt and make payments on time, and you get good out when your credit score rises. While banks and credit unions use your credit score to figure out if they can offer you a loan, that’s not the only thing they consider. A couple other factors are:
Job history is important to financial institutions because it shows that you have a way to pay back the money they loaned you. It shows that not only do you have a job now, but you’re most likely to have a job later. The type of loan that you’re getting might determine how much work experience you need.
Your debt-to-income ratio is important because it shows whether you have a healthy amount of debt compared to your income. A study from Consumer Finance in 2019 states, “Evidence from studies of mortgage loans suggest that borrowers with a higher debt-to-income ratio are more likely to run into trouble making monthly payments.” If you have a high amount of debt, getting another loan may be risky.