Character still counts today!
More so in financing than any other area. Why is that, you ask?
The reason this is so, is because lenders want to know how well you meet your obligations to them. To do this they go back and look at your borrowing history.
The Credit Report
The credit report is still the best indicator of your history as far as your character goes. Here lenders will be able to find out how well you paid off other previous debts, how you are doing with current debts, and how many debts are you carrying currently.
How did you pay off your previous debts tells lenders that you were either prompt or not; fulfilled your obligations or not. And so on.
How you are doing with your current debts also tells the lenders what your ethics are in maintaining a good character. Are the payments a reflection of your honesty in meeting your obligations or do they reflect your unconcern in this area?
How many debts, and how clean they are, will be the most critical factor in showing good character. This will indicate to lenders that you have a good income, or sources of income, to meet your debt well. The higher the amount of debt that you have the more will you be able to score high for character to financing lenders. This is also known as capacity and it is a story for another day.
There are somethings you can do to help you increase your character if it is a little shady now. And, although not exhaustive, the following will go a long way to help you become a good character.
First, make sure you check your credit reports from all three major credit reporting agencies. You should be able to get a free report once a year from those agencies. But, there are a number of web sites that will allow you to get a free report provided you are willing to subscribe to the site.
Once you have the credit report, verify as much as you can, that all the debts and information listed in it is yours and not someone else’s. It does happen.
Go through the debts and check for late payments and all anomalies you aren’t sure about or can’t explain. Do research on them to make sure they are valid, they can be removed, or disputed.
Second, work on getting your loan to balance reduced as much as you can. Pay off debts faster than you are asked to pay them, in other words, don’t pay just the minimum balance but as much as you can to pay it down quickly. Once your loan to balance is such that you have a real nice cushion there, you will notice that your credit rating will go higher.
Watch out that you pay anything that’s current. Any debts that are longer than 3 years, on average, should be left alone as this will not help you in the short term. There are exceptions. So, be careful and do your homework before you attempt this.
Lastly, Cleaning your credit is just one part of the puzzle in gaining a very high character rating.
It doesn’t stop there. You also need to increase your visibility in the marketplace. This has to do with your ability to bring others into the mix. Have you joined organizations that are in line with your business interests and goals? Are you a published expert? Do you have name-recognition in any other area, as well? Can you “drop any famous personalities” into your resume?
All of these will help improve your character to the point where the lenders will show an interest in doing business with you, or at the very least, consider doing business with you.
What do you think?
Do you have the character others would appreciate enough to want to do business with you?
Does it matter?
Let me know what you think.
Also, make sure you read the rest of the options that will make you attractive to lenders (click on that link) or for that matter, to the marketplace. Don’t forget that your most important item in the marketplace won’t be the lenders you impress but the customer, the buyers, that will do business with you.
Best wishes on your endeavors.