If you've been trying to figure out how to do consumer credit repair, there are five major C words to lenders. Those major areas are character, capacity, capital, collateral and conditions.
Character
Character refers to how well lenders can trust you. If they know you personally, that's great. Oftentimes, this is determined by how well you've made payments on time.
Credit cards especially report 30, 60 and 90 day delinquencies to the credit reporting agencies. Each negative entry counts against your credit score. If it's not already there, you'll want your report to show all accounts in good standing to repair your consumer credit.
Capacity
Capacity is your cash flow. You have to have enough money to handle the debt you're asking for. They look at your income and expenses for each month. Lenders rightfully want to make sure you have enough money to make the payments.
Capital
Capital is your net worth. Even if you're making plenty of money each month, if you have way more debt than you have assets, you're a bigger lending risk. Having more assets shows you're worthy of more credit.
Collateral
Collateral is something to secure the debt. Typically, loans are secured by property such as real estate or vehicles. If there's something to get back should you default on the loan, there's less risk to the lender.
Conditions
Conditions are actually market and economic conditions. With the fall, consolidation, bail out, etc of many large financial institutions, lending guidelines have become tighter.
This also applies down to your local lender. If a banker is having a bad day or maybe you look at him funny, that could affect whether you're approved or not.
When you're looking to repair consumer credit, remember the five Cs: character, capacity, capital, collateral and conditions. - 31379
Character
Character refers to how well lenders can trust you. If they know you personally, that's great. Oftentimes, this is determined by how well you've made payments on time.
Credit cards especially report 30, 60 and 90 day delinquencies to the credit reporting agencies. Each negative entry counts against your credit score. If it's not already there, you'll want your report to show all accounts in good standing to repair your consumer credit.
Capacity
Capacity is your cash flow. You have to have enough money to handle the debt you're asking for. They look at your income and expenses for each month. Lenders rightfully want to make sure you have enough money to make the payments.
Capital
Capital is your net worth. Even if you're making plenty of money each month, if you have way more debt than you have assets, you're a bigger lending risk. Having more assets shows you're worthy of more credit.
Collateral
Collateral is something to secure the debt. Typically, loans are secured by property such as real estate or vehicles. If there's something to get back should you default on the loan, there's less risk to the lender.
Conditions
Conditions are actually market and economic conditions. With the fall, consolidation, bail out, etc of many large financial institutions, lending guidelines have become tighter.
This also applies down to your local lender. If a banker is having a bad day or maybe you look at him funny, that could affect whether you're approved or not.
When you're looking to repair consumer credit, remember the five Cs: character, capacity, capital, collateral and conditions. - 31379
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