30 December 2010
Credit Card History and Credit Information Report in Home Loans
Credit information report is one of the most important criteria for approval of a home loan. Easy spending power with the consumer has led to many people using many different credit cards. Though they end up paying more as interest the consumer is happy to purchase at their own free will and then pay later at the end of the month. CIR as it is termed is the most important criteria for home loan approval.
The history of the client’s financial dealings that is salary and spending amount indicates their financial status. If both spouses are working than both their salary amount can be considered. Take away home pay and their monthly usage of credit card indicates how much expenses are incurred and how much remains as savings amount. This is very important by the borrower to plan their credit card history before hand and later apply for a home loan for better chances of approval. Let us note some important points for increasing our chances positively for loan approval.
1) Plan in advance before applying for a loan. Keep watch for your credit card usage and keep the amount low. The CIR must reflect your financial status.
2) Your history of repayment of loans on time will definitely be a plus point for the lender.
3) Never out spend your credit card amount. Always be in limits and your expenses must be less than the total amount available for credit. The lender will consider that you have to have a substantial balance for repayment of the newly applied loan without any hassles.
4) Always keep payments on time. Your monthly electricity, telephone and credit cards bills must always be paid on time. This shows your financial capacity and habit of paying on time.
5) Credit card usage must be limited to certain amount, in fact if the usage is less the better chances of your loan approval. This assures the lender that you can manage your expenses without credit.
Thus for better chances of loan approval and avoiding the rejection of your loan application it is better to keep a watch at your credit card history.