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The first thing your loan officer will scrutinize is your ability to repay a loan. To do this, he looks at your employment, the length of time of that employment, and the stability of that employment. Is your occupation stable, or are there lay-offs? Is it seasonal work? This is the first thing the lender will find out. He/she will want to know that income has previously been spent. Do you have previous obligations, such as alimony or child support? If your present living expense is in excess of 40 percent of your gross monthly income, then, in all probability, your loan will be denied.

The next thing your lender will look at is your personal character. The fact that you have the ability to pay, does not guarantee you have the character to pay. Some indications of a stable character are credit checks through credit bureaus, length of time in the community, etc. Most lenders will make a personal judgment of your character during your personal contact. Do everything you can to make a good impression.

The lender will want to protect himself if he has been misled on your ability to pay or misjudged your character. This is security or collateral. Your lender will not lend you $1,000 for a new couch that's worth $500. If you would not repay, the collateral needs to cover the amount of the unpaid balance.

More details and information regarding what Lenders Look For are available online in "The Way to Good Credit" Guide. We also include charts and graphs to help you create the budget that meets your lifestyle.