Which items do credit card and lending companies use to determine whether to lend you money or not?

Credit card and lending companies typically use several key factors to determine whether to lend you money. These factors help assess your creditworthiness and ability to repay the loan. Here are the main items they consider:

1. Credit Score: This is a numerical representation of your creditworthiness, based on your credit history. A higher score indicates a lower risk to lenders.

2. Credit History: Lenders review your history of borrowing and repaying debts. This includes the length of your credit history, the types of credit accounts you have, and your payment history.

3. Income: Your income level is assessed to determine your ability to repay the loan. Lenders often require proof of income, such as pay stubs or tax returns.

4. Debt-to-Income Ratio: This ratio compares your total monthly debt payments to your monthly income. A lower ratio suggests that you have a manageable level of debt relative to your income.

5. Employment History: A stable employment history can indicate a reliable source of income, which is favorable to lenders.

6. Existing Debt: Lenders consider the amount of debt you currently have. High levels of existing debt may make it more difficult to obtain additional credit.

7. Collateral: For secured loans, lenders may require collateral, which is an asset that can be seized if you fail to repay the loan.

8. Credit Utilization Ratio: This is the amount of credit you are using compared to your total available credit. A lower utilization ratio is generally better.

By evaluating these factors, credit card and lending companies can make informed decisions about whether to extend credit to you and under what terms.