Credit & Eligibility
Lenders weigh your credit history, your income, the debts you already carry, and sometimes collateral or a cosigner. Each lender weighs them differently, and none of them can see more than you show them. Here's how to understand the process, and what your rights are if they say no.
Start here if: You want to know how a lender will see your application, or why one said no.
What Lenders Look At When You Apply for a Loan
A plain map of the factors behind a loan decision, the arithmetic of debt-to-income, and the characteristics a lender is not allowed to hold against you.
The credit and eligibility guides, in a sensible order
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Explainer
What Lenders Look At When You Apply for a Loan
A plain map of the factors behind a loan decision, the arithmetic of debt-to-income, and the characteristics a lender is not allowed to hold against you.
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Questions answered
Prequalified, Preapproved, Approved: What Each Actually Means
Answers to the questions people ask when a lender says "you're prequalified" or a letter says "you're preapproved," including what can still change before you get the money.
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Explainer
Hard vs Soft Credit Inquiries: What Counts and for How Long
Which credit checks touch your scores, how long they matter, and how to compare loans without piling up inquiries.
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Step by step
Turned Down for a Loan? What to Do Next, Step by Step
A denial comes with rights and with information. Here is how to use both, and the moves that tend to make things worse.
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Explainer
Before You Cosign a Loan: A Letter to the Person Being Asked
If someone is about to ask you to cosign, this letter tells you what you'd really be signing. If you're the one asking, send it to them first.
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Explainer
Gig Pay, Benefits, Child Support: The Income Lenders Count and How to Prove It
Most people with uneven income under-report it. This field guide takes each income type in turn: how lenders tend to see it, the paperwork that proves it, and what to watch for, plus the federal rules that protect benefits and part-time pay.
Questions people ask about credit and eligibility
Will checking my rate hurt my credit score?
Prequalification usually uses a soft inquiry, which doesn’t affect scores. A full application usually means a hard inquiry, which can lower a score slightly for a while. Ask the lender which kind it uses before you start. Hard versus soft inquiries.
Is there a minimum credit score to get a loan?
Each lender sets its own rules, and scores are only one factor. Income, existing debt and the type of loan matter too. There’s no single number that applies everywhere.
Why was I turned down?
The lender has to tell you, or tell you how to ask. Look for an adverse action notice, then check your credit reports for errors. What to do next.
- Checklist
Application ChecklistWhat to gather, what to check on your credit report, and the questions to answer for yourself first. Saves your progress in this browser.
- Budget planner
Affordability ExplorerStart from your own month: income, fixed costs, and a cushion. See a payment range you're comfortable with and what loan amounts it covers at different rates and terms.
- Worksheet
Offer Comparison WorksheetEnter up to three real offers. The worksheet totals each one, checks the numbers against each other, and shows which costs least overall.
- Credit score
- A number, commonly from 300 to 850, that summarizes the information in a credit report to predict how likely you are to repay. There are many scoring models, so your score can differ depending on which one a lender uses.
- Credit report
- A record of your credit accounts, payment history, balances, inquiries and some public records, kept by credit bureaus. You can get free reports from each national bureau through AnnualCreditReport.com.
- Debt-to-income ratio (DTI)
- Your monthly debt payments divided by your gross monthly income, as a percentage. Lenders use it to judge whether you can take on another payment. Each lender sets its own limits; there is no universal cutoff.
- Hard inquiry
- A credit check made when you apply for credit. It appears on your credit report and can lower a credit score slightly for a while.
- Soft inquiry
- A credit check that doesn't affect credit scores, such as checking your own credit, many prequalification checks, and prescreened offers.
- Adverse action notice
- The notice a lender must give when it denies credit or offers worse terms based on your application, explaining the reasons or how to ask for them, and, if a credit report was used, how to get a free copy.
- AnnualCreditReport.com
The official site for free credit reports from Equifax, Experian and TransUnion.
- CFPB: Credit reports and scores
How credit reports work, how to dispute errors, and your rights.
- OptOutPrescreen.com
The official way to opt out of prescreened credit and insurance offers.