All Loan and credit card approvals are governed by three types of credit

Your ability to make payments in the past is the main deciding factor in approving your loan application. It is the backbone for all lending.

Lenders are placing a much greater emphasis on how well loan applicants are managing the credit that they have had before. Believe it or not poor credit is caused more often from unchecked mistakes on our credit reports, than it is from not making your payments on time.

In short never assume that your credit history is spotless, even if you are diligent in making all payments. Mistakes are common and do take time to have corrected.

Before you can apply for any type of credit whether or not it is a loan or a credit card, you should know what lenders are looking for and how they decide what is good or bad credit.

Can Bad Credit be Deleted?

Yes, it can. Despite what some people say and credit bureaus everywhere, a simple fact remains: negative credit listings are deleted from peoples' credit reports by the thousands each and every day. It doesn't take that long to get the process started.

1. You need a credit reporting service that monitors you fico score and where you can have access to your credit report and history. The two better companies for this is Equifax or Experian.
2. Get help fixing your credit history by using a professional credit repair service. Lexington law firm is the only legal company that has a very high record of success.

They will look at the past 24 months of what has been reported to credit bureaus, paying particular attention to the last 12 months. The lender wants to see at least an attempt at paying your bills on time. Especially when it comes to the different types of credit that people use.

The three main types of credit that lenders review

Revolving credit: The best example is credit cards then there would be store charge cards. No payments should be 60 days or more past due and no more than two payments 30 days past due. Keep a record of why you where late on your past payments ( it really helps)

Installment Credit: One example is car payments. The same goes here, they will look at your past payment history and then ask you for reasons of why you where late on any past dues.

Housing Debt: This will include all mortgages or rent payments. This is an important one, no payments can be past due.

Contrary to what most credit reporting agencies will say, good credit does not mean a perfect nor spotless credit report. It must however be fairly close to these guidelines and contain no adverse information such as liens, judgments or collections notices.

The three main credit areas you need to review

Your Report: Is just that a file so to speak of all your financial dealings with companies that have extended you credit or that you made payments to including insurance and rent. This is really just a compilation of data that companies have collected about you in regards to any and all types of financing you have made or applied for over the past number of years, normally 7.  Yes it is scary how much they know.

Your history: The information that was sent to them by other people and companies.  There will also be information on late payments made by you to any company including utility companies and if you where ever renting. It will list when and how you made your payments. It will also mention how much money you borrowed in the past and how timely it was repaid.

Banks submit this type of data and is the basis for your loan and credit card approvals. This is the main section that your credit score will come from. This is the section you want to repair or have any errors corrected. Pay very close attention to it.

Your Score: This is a number that reflects how much money you earn and how much money you owe, the dreaded debt ratio. It defines what is rated as good credit or bad credit on a sliding scale.

The higher the number the better your credit is. The lower the number say below 500 shows that you are a high credit risk and it will be hard to get a loan approval without some type of security. This is the part that you want to improve.

What is the best method of having your credit payment calculated?

Credit terms and conditions affect your overall cost. So it's wise to compare terms and fees before you agree to open a credit or charge card account. An adjusted balance it the best method for card holders to have their payments calculated.

Your balance is determined by subtracting payments or credits received during the current billing period from the balance at the end of the previous billing period.

Purchases made during the billing period aren't included. This method gives you until the end of the billing cycle to pay a portion of your balance to avoid the interest charges on that amount.

Most creditors will exclude prior, unpaid finance charges from the previous balance. You can read more tips about loans and credit card debt reduction by searching through this site.

For more information Government credit information here