Is Credit Score the Only Thing Lenders Look For?

Credit score is not the only thing lenders look at when deciding to give you a loan. In fact, you credit score can be 620, but the lender may deny you a loan and accept another person’s loan with the same credit score as you. A lender decision is not solely dictated by what a person’s credit score is, but other factors also come to play. If you are planning to ask for a loan and you are confident about your chances to obtain one due to your credit score, don’t be, as you need to consider the following factors that may become the deciding factor in the end:


Your lender will ask you about the kind of work you do and the money it earns you. The lender will not like to hear that you switched to a new job in three to six months. They are looking for a person who can stay employed for at least two years, changing jobs only two times in the span of five years. If you keep switching jobs, your lender may reject your loan application, as a steady and long-term indicates their ability to pay as opposed to a string of jobs over the years.

Debt to Income Ratio

Most lenders prefer seeing a ratio of no less than 45 percent. A lender will accept a 60 percent ratio for a person with a favourable credit score. The ratio provides the lender with a hindsight on your ability to repay them and they derive the amount from your gross salary. If you want to give the lender a big down payment or you have a co-signer, lenders can look pass these factors.

Social Media Accounts

Another thing the lender will look at is your different social media accounts. Even though this seems a little too far-fetched, these days’ social media accounts reveal a lot about a person. By investigating your social media accounts, they may receive knowledge about your spending habits and your borrowing history. Do not post anything on your accounts that will give them a red flag and lead them to deny your loan application.

Housing Record

Lenders will ask you to tell them the number of times you moved within a year. If you moves several times in a year, they may sense you having some financial issues, thus leading them to reject your loan application. If you have stayed in the same home for several years and if you moved, there was a relevant reason such as a growing family or job relocation, they may consider lending money to you. Before you apply for a loan, you have to make sure you do not fall under any of the categories listed above. If you have a good credit score and you do fall under one of those categories, you have a 50-50 percent chance of the lender approving your request for a loan.