If you are going to petition a line of credit, good planning is essential if you want to receive the desired response. To help you in this regard, this article will give you some pointers as to what determines a positive or negative response to an application for a line of credit.

There are several principal factors to be aware of. For instance, when you apply for a line of credit, underwriters will examine every credit account you have that is active at present. This shows up on your credit report along with the amount of your required monthly payments. This helps them to determine your debt to income ratio.

The underwriters will also want to know how much you have to pay for rent if this is not listed on your credit report. The usual rule of thumb is that your debt to income ratio will not exceed forty percent of your income. This changes per bank or credit union but is a good figure to keep in mind.

It is also important to be have a good credit score. If your score surpasses 700, most would deem that to be a respectable score.

Your credit score will be harmed by any credit card debts that surpass 50% of you credit limit. It will also be negatively influenced by any other financial troubles, such as insolvency or repossessions, that appear on your credit report.

The third factor which goes into play is how long you have been living at your residence and been at your current job. These two pieces of information can determine whether you have stability.

Underwriters are more willing to lend to people with good stability because there is less of a credit risk. The third factor is not as important as your ability to repay and your credit history.

These three factors explain the bulk of the decision making process for a line of credit.