Bad Credit

It's very important for the borrower to manage his or her personal credit wisely in order to keep a clean payment history and avoid negative entries on a credit report. Lenders focus on a number of aspects in the credit file, including the total amount of credit outstanding, the payment history, and any public records that could indicate unsatisfactory or irresponsible conduct of the borrower's personal affairs.

If the borrower has bad credit, the lender should be told why. There are times when bad credit is not the result of poor management or a lack of responsibility, but rather circumstances that affect the borrower's ability to meet those responsibilities on a consistent basis. To earn the lender's confidence, the borrower must demonstrate that those circumstances have been surpassed or improved to a degree that will not interfere with his or her ability to make payments on the loan being requested.