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What do lenders consider when they look at your credit report?

The first thing will be your track record of making on-time payments, because more than anything, lenders want to get paid. A potential borrower’s payment history accounts for 35% of her FICO score, or credit rating. Late or missed payments, mortgage defaults and bankruptcy are all red flags.

They’ll also look for large amounts of outstanding debt. The less you have, the better your chances of obtaining credit. Lenders figure that the more debt you have, the less likely you’ll be able to pay it back. Outstanding debt comprises 30% of your FICO score.

A long record of responsible credit use will boost your credit ratings -- the length of your credit history counts for 15% of your score. Opening several new credit cards, on the other hand, will hurt your score because that makes lenders wonder why you need so much credit, and if you’ll be able to pay it all back if you run those new cards to the limit. New credit accounts for 10% of your FICO score.

Lenders want to see borrowers who know how to use a variety of credit – from car loans to credit cards. The final 10% of your score weighs the type of credit used.

Beyond your credit score, lenders look at your income, employment history and savings, as well.

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