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Wednesday, August 12, 2009

What Form of Guarantee Do I Need to Get a Home Or Car Loan?

As far as the credit system is concerned, the basic form of surety you will need to access financial aid from lenders is your credit profile. For you to have access to any kind of loan, however, banks will have to be assured that you are credible enough to repay the funds at on or before the agreed date.

But you can't just give them your trust simply by word of mouth. In making their decision, banks will purchase your credit report from information bureaus to have an insight into your financial history. It is this document (your credit report) that they will use in deciding how worthy you are with managing credit.

For you to have an idea how much of a chance you stand when creditors check out your profile for making a loan decision, it is best you know that a fairly good score starts from 660. A good score is about 690, and you should be very confident that you will get very favorable loan terms if you have a score of about 700.

Though a consumer with a score of 670 can equally get the same amount of credit as that of a person with 770, the interest rate each of them will be required to pay during the repayment of the debt will vary. If you have a score of say 790, you will definitely pay much lower interest than someone with 640 even if you get the same amount of credit from the same financial institution.

Now that you have seen the clear picture, it is important that you pay more attention to how you are rated by information bureaus. The means by which you can do this is to get a copy of your credit report from annualcreditreport dot com. Remember that you are entitled to one free copy a year.

If you find that your score will either deny you access to loan or deny you favorable interest rate, then your next resort should be to repair your credit profile.


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