What less than perfect credit means

How you used your credit in the past and the reasons for your past financial difficulties are two factors that figure in your ability to get a loan.

The first step is to understand if you are considered a credit risk. Most lenders will consider you a higher credit risk only if your credit report states that you have more lates and slow payments than stated in the categories given below:

• Revolving credit (i.e. credit cards): No payments 60 days or more past due and no more than two payments 30 days past due.
• Installment credit (i.e. car loans): No payments 60 days or more past due and no more than one payment 30 days past due.
• Housing debt (i.e. mortgages and rent): No payments past due. This can be proven by providing (borrower's) canceled checks for the past 12 months or a loan payment history from the mortgage servicer.
  

In all categories, all late payments must be explained.

Contrary to popular belief, good credit does not necessarily mean perfect credit. If your credit reports show any 60 to 90 day late payments you may need to seek out a lender that specializes in less than perfect credit.