Character
You can pull this document free at AnnualCreditReport.com; lenders read it to judge how you handle what you owe.
What is a credit report?
Wages, self-employment earnings, per capita distributions, Social Security: to a lender, these are all verifiable sources of this.
What is Income?
The money you put down up front on a home or car, the most familiar example of capital.
What is a Down payment?
On an auto loan it is the car; on a home loan, it is this.
What is the house?
Under Conditions, a lender starts with this: the reason you are borrowing the money.
What is the purpose (of the loan)?
A three-digit number that summarizes borrowing history.
What is a Credit Score?
A ratio comparing monthly debt to monthly income.
What is Debt-to-income ratio?
Money set aside in this type of account shows a lender you have reserves to fall back on.
What is a savings account?
Backed by collateral, this type of loan gives the lender something to claim if payments stop.
What is a secured loan?
Alongside purpose, lenders weigh this dollar figure: how much you are asking to borrow.
What is the loan amount?
Let an old store card go unpaid long enough and it can turn into this type of account, a major red flag in a credit history.
What is a collection account?
In the DTI formula, total monthly debt payments get divided by this figure.
What is gross monthly income?
In the DTI formula, total monthly debt payments get divided by this figure.
What is gross monthly income?
With no collateral behind them, these loans, like most credit cards, typically carry higher interest rates.
What is an unsecured loan?
Interest rate trends and the state of the job market fall under this two-word factor lenders consider.
What are economic conditions?
With no credit file yet, some lenders can consider this kind of credit history instead, built from payment records outside the credit bureaus.
What is a nontraditional (or alternative) credit history?
Many lenders want to see a DTI under this percentage before approving a loan.
What is 36-45%?
If your paycheck stopped, capital gives you these: BNC's term for other ways to keep the loan paid.
What are alternative repayment sources?
Miss enough payments on a secured auto loan and the lender can take the vehicle back through this process.
What is repossession?
Conditions also asks whether this is right, as in whether now lines up with your goals and situation.
What is the timing?
Do this on a relative's auto loan and their late payments, even a repossession, can show up on your own credit report.
What is co-sign?
A $300 auto loan, a $150 personal loan, and a $50 store card payment on $2,000 gross monthly income: this is the DTI.
What is 25%? (Host math: $300 + $150 + $50 = $500; $500 ÷ $2,000 = 25%)
Skin in the game: BNC's two-word phrase for your own money in the deal.
What is personal investment?
If repossessed collateral turns out to be worth less than what is still owed, the borrower may still have to pay this.
What is the difference?
BNC sums up Conditions in four words: "situations that affect" this.
What is repayment?