Guidelines tightening for loan applications - KWWL - Eastern Iowa Breaking News, Weather, Closings

Guidelines tightening for loan applications


by Jenn Jarvis

WATERLOO (KWWL) -- The financial crisis has some lenders tightening credit lines, making it harder to get a loan. That makes your credit score more important than ever.

Some people think their credit score is beyond their control. But lending experts say it's just the opposite. Your behavior is the only thing that affects your score.

A credit score is basically the number that represents your entire credit history. Scores range from 300 to 850, with 680 and above being ideal. Falling below 500 could keep you from getting a loan.

"If you come in to borrow money from any lender and your score is on the high end, you're going to receive not only a better interest rate, but possibly more money," loan expert Lynn Widdel of Veridian Credit Union said.

While some lenders are being more careful about who they lend money to, Veridian says it has not changed its lending guidelines and has actually exceeded projections for loans this year.

Experts advise checking your credit history at least once a year. You are allowed one free copy of your credit history each year from the three credit bureaus, which you can get at To actually see your credit score you can use a site like But, it is only free during the trial period and you will be charged if you don't cancel the membership.

When you look over your credit report, you can see what might be lowering your score and avoid it in the future. You can also look for inaccurate information or identity theft and report it to the credit bureau.

If you're looking to improve your credit score, keep these things in mind.

Pay your bills on time: delinquent bills are one of the fastest ways to bring your score down.

Keep your balances low: the amount of credit you have available compared to the amount you are using will affect your score. Experts say to keep the balance below 50 percent of your limit.

Don't cancel credit cards: the total amount of credit you have available affects your score. Experts say it's good to pay off your credit cards, but don't actually cancel them.

Don't apply for more credit than you need: How often you apply for credit and have much credit you have available affects your credit score. Applying for several credit cards in a short time frame can hurt your score.

If you have good credit habits now, but didn't in the past, have patience. Things more than 12-18 months in the past have less of an effect on your score than your current situation. But even if you're score isn't what you'd like, it isn't the only factor in qualifying for a loan.

"In addition to that we always take a look at your application information so how stable is your monthly income and how long have you been on the job and what do your different debts look like," Widdel said.

Online Reporter: Jenn Jarvis

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