What? This letter says my application for an auto loan was denied, but why?
That's because your credit is too low.
Credit is the ability to take out loans or other money that you will pay back later. Credit can be found in the form of things like home credit cards, mortgages or auto loans. There are also three kinds of credit, revolving credit, installment credit, and open credit. The most common of the three is revolving credit. Revolving credit does not have a fixed number of payments and can be charged any amount of times up to a certain amount, this is usually found in the form of credit cards or home equity lines of credit. Installment credit refers to large money loans that you pay off with a fixed regularly occurring schedule. These are found as student loans, mortgages, auto loans, or personal loans. Finally, open credit allows you to borrow from an account up to a certain amount but must be paid in full by a certain date. Open credit is usually used as charge cards.
Credit is determined through five different components and three c's.
Okay, that's cool, but how do they figure out my credit? And how can i change it?
Your credit is shown as a 3 digit number that resembles your credit risk, this is your credit score. Your credit score is determined by five components that each have a different weight to them. New credit makes up 10% of your score, length of credit history is 15%, credit mix is 10%, payment history is 35%, and amount owed is 30%. There are also the three c's, character, capital, and capacity. Click To EditYour credit is shown as a 3 digit number that resembles your credit risk, this is your credit score. Your credit score is determined by five components that each have a different weight to them. New credit makes up 10% of your score, length of credit history is 15%, credit mix is 10%, payment history is 35%, and amount owed is 30%. There are also the three c's, character, capital, and capacity. Character represents your credit history and if you possess the honesty and reliability to repay a debt. To determine this, the lender may ask, Have you used credit before, Do you pay your bills on time, How long have you lived at your present address, or How long have you been at your present job. Capital represents your collateral and if you have valuable assets such as real estate, personal property, investments, or savings with which to repay debt if income is unavailable. Finally capacity, which is your ability to pay off the debt. To find your capacity, your lender may as you what is your current salary, how many other loan payments do you have, What are your current living expenses, what are your current debts, Help Insert ParagraphUndoes the last commandRedoes the last commandTabUntabSet a bold styleSet a italic styleSet a underline styleSet a strikethrough styleClean a styleSet left alignSet center alignSet right alignSet full alignToggle unordered listToggle ordered listOutdent on current paragraphIndent on current paragraphChange current block's format as a paragraph(P tag)Change current block's format as H1Change current block's format as H2Change current block's format as H3Change current block's format as H4Change current block's format as H5Change current block's format as H6Insert horizontal rulelinkDialog.show Summernote 0.8.11 · Project · Issues