Are You Credit Worthy?

Credit History: Every time you pay a bill, this action is tracked by a credit bureau. They note whether it was paid on time, whether the minimum payment was made, as well as the total amount of debt you have accumulated. The effectiveness of your ability to pay this bill results in a credit or FICO score between 300 and 850.?

Income: A lender will look at? your income, how long you've been doing your job, if you bounce from job to job and how long you've been working in your particular profession. All of these criteria go toward creating a profile of stability and ability to pay the debt. They compare your income to the cost of your mortgage, credit card bills, car payment or any other outstanding debts and use this figure to create a debt-to-income ratio. Generally this number is kept under 36 percent.

Loan to value ratio (LTV):? This is the difference between what you owe on your house and what it's actually worth; for instance if your home is worth $100,000 and you have an outstanding balance of $80,000, your loan to value ratio is 80 percent. Lenders usually keep this total at about 80 percent or less.