A near-to-perfect credit score isn’t the only criteria to determine the credit worthiness of an individual. It works in favor of individual to get the loan approved at a low interest rate; still, what’s in the credit report that might have a significant role in whether or not the lender extends the credit.

So, what is it that your credit report says and your credit score doesn’t?

Credit Report is Holistic

Along with the mortgage lenders, renters, credit card companies and even employers look beyond the credit score. They need to know the credit, payment and dues history of the individual to be sure that he will be able to repay the amount on time.

There are, for example, chances that an individual worked hard on credit score improvement by paying off all the debts, spotting errors and filing for correction and various other ways. While all this has been done in one year, he had a bad credit score in the past. By looking at the credit score, lenders will find him eligible for a low interest loan, however, the credit history isn’t that clean.

In many cases, it has been seen that mortgage lenders adopt a holistic approach and refer to credit report where as auto loan providers only see the credit score.

Credit Report Clearly Shows Debt to Income Ratio

There are individuals who have plenty of cash flow, still, have high debt on their credit cards. In such a situation, lenders can notice that borrower is effectively subsidizing his lifestyle by using credit card. This is an example of irresponsible use of credit and chances are high that the loan might not get approved.

Rebuilding Your Credit

Paying bills on time and making more than the minimum payment on the credit card are two things every individual should take care of all the time. Along with making you look more trustworthy and responsible, these will increase your credit score.

When it comes to credit report, last two years are more important to the lender. So, instead of wasting time in getting the dues history from the past seven years removed, focus on improving your score for the last two years.

For those in the process of credit repair or seeking help from credit repair services, a lender might be skittish in loan approval. The reason behind is that at times, entries are removed from the credit report on a provisional basis. So, the lender might prefer to wait for some more time till the entries removed are “old” to pass your loan.

Maintaining Good Credit Practices

Credit score is a basic hurdle and just cleaning it up might not help you qualify. Post credit bubble of 2000, lenders have become more strict about loan approvals. While community banks and credit unions might sanction the mortgage, chances are rare that a large institution will qualify you with a bad credit report.

So, always try to maintain good, basic credit practices that influence your credit score and the credit report in the positive way.