These days, it’s not enough to just know what your credit score is. To make a real difference amid all the financial and real estate challenges facing you, you need to know why your credit is the way it is – and how to fix it if it needs fixing!

What lenders look for in a quality candidate for a loan, mortgage or credit card

It’s called “creditworthiness.” Or, better yet, summed up by these five C’s:

Character

This refers to your “credit history.” It’s the road map for the kind of character you’re portraying in terms of your reliability to pay things off.

If you have a lot of debts on your credit report, that says miles about your character – in ways you don’t want it to!

Capacity

How good is your income? What’s your salary like?

This tells a lender, in particular through what’s called the “debt-to-income ratio (DTI),” how often you’re paying off your loans, cards and balances in relation to how much those loans, cards and balances are.

Capital

Lenders will even look at “capital,” which generally summarizes your savings, investments and assets.

In essence, how much you save of your income plays a major factor in whether that lender says yes!

 Collateral

This is much like capital, but on a more material basis – it’s a car, or a home, or a business, or jewelry. Anything of value, really, that you can “put down” or offer as collateral, boosting your credibility and trustworthiness.

On a more defined lender-level, though, typically any secure loan or credit card would do with less risk and potential to build your credit in the long run.

And, lastly – Conditions

This is more abstract, but also telling as to why it’s so crucial you keep all of this in mind. The conditions of your creditworthiness may also apply to your specific future goals, the current state of the economy and federal interest rates.

In essence, consider when your creditworthiness (or lack thereof) matters, and that sums up the conditions.

You can see a lot plays into the success (or failure) in getting that home loan

Or getting that credit card. Or getting that car loan. Or getting that personal loan. Or any kind of loan for that matter!

Your credit score’s a window into the full spectrum of what a lender looks at. It’s critical you have access or help into understanding every nuance of how your credit score incorporates that complete view.

Where to get that help? Simply ride the Credit Comet!