5 Important Factors Impacting Your Credit

    Published: 06-16-2009
    Views: 16,750
    Wells Fargo financial expert Stephanie Chisolm provides the five most important factors that impact your credit.

    Stephanie Chisholm: Reaching many of life's important financial goals often requires borrowing some money. If you are going to get a loan from a bank or a financial institution, you will need to have good credit.

    The more you know about how to achieve and maintain healthy credit, the greater your chances of getting the financing you need. It begins by understanding the five Cs that lenders generally use to evaluate your credit worthiness.

    Credit history; this is a record of how responsible you have been in meeting your financial obligations. It's important to pay your bills and make your loan payments on time.

    Capital; do you have other assets that could be used for loan payments in case income is interrupted?

    Capacity; what percentage of your income is going toward paying debt? You don't want to borrow more than you can reasonably afford to pay back.

    Collateral; this is applicable when applying for secured credit cards. What assets do you have to secure a loan? A secured loan is often easier to qualify for than an unsecured loan.

    Conditions; what are your reasons for applying for the loan? What are other factors that may impact your ability to repay the loan?

    It's important to make good decisions in these five areas, so that you can qualify for lower interest loans and other forms of credit when you need them.