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01 September 2011

What Does Your Credit Report Indicate?


Many of us are not aware that our credit card report is also one of the major criteria for selection during applying for a home loan. We use credit card in our daily dealings but are unaware that its use reflects our spending habits and our income lifestyle. How does it relate to this factor will be discussed in this article.
Home loan approval is very importantly related to our financial standing and position in the society. The major criteria for selection for home loan are our repaying capacity. All this can be got by viewing our monthly salary slips, our assets and our financial investments.  This is the first that any lender sees before moving ahead with the procedures of approval of home loan. How does this indicate our financial standing, is that it clearly shows our use of the credit card after every purchase. Our repaying habits whether they are within the time limits or do we sometimes overdo the time given for repayment. Is there any default in repayment schedules and interest applied or penalty fees will also be clearly mentioned in our credit card. Some people have the habit to overspend every month than their total salary and are always in the negative list. Some of them do not use the credit card anytime and so they clearly indicate that they can afford their lifestyle by cash dealings without the use of credit card.
Credit card report will show expenses, income and savings at a glance. Hence the lender is very cautious to see the CIR (Credit Information report) before considering any loan application during purchase of a house. And if this report has no defaults in repayments and always shows money left from monthly expenses that is savings on the higher side, then it is considered a s a positive point and gives the signal of go ahead for acceptance of the home loans.

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