The 5-Point Approval Checklist
The 5 things lenders check before they say yes, from someone who used to sit on the lender side.
1. Payment history (35% of your FICO score)
Lenders look hardest at the last 24 months. One recent 30-day late payment can hurt more than an old collection. Do this: set every account to autopay at least the minimum, today.
2. Utilization (30%)
The balance reported on your statement date divided by your limit, on each card and overall. Do this: pay cards down to under 10% before the statement closes, not by the due date.
3. Negative items, and whether they are accurate
Collections, charge-offs and repossessions hurt, but many are reported with errors: wrong balances, wrong dates, duplicates. Under the Fair Credit Reporting Act, everything on your report must be accurate, complete and verifiable. Do this: pull all 3 reports and look for anything that does not match your records.
4. Hard inquiries
Several hard pulls in 6 months tells a lender you are shopping for credit everywhere. Do this: stop applying until you know you will be approved, and group auto or mortgage shopping into a 14-day window.
5. Banking history (ChexSystems and Early Warning)
Banks check these “banking credit reports” before opening an account. A past overdraft or closed account can block you before your credit score even matters. Do this: request your free ChexSystems and Early Warning Services reports once a year.
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Educational content only, not legal or financial advice. Results vary.