Due to economic turmoil, consumers are facing hard time in getting loans. Lenders review credit reports to determine credit worthiness. People are shocked when they are denied loans or credit cards because of poor credit scores. They are often not aware of it, but lenders review credit reports before making any move.

Let’s learn about the aspects commonly noticed by lenders on your free annual credit report provided by the agencies.

• Inquiries: Individuals are allured by the free gifts offered by credit cards which add a hard inquiry to the report. Lenders consider that you are looking for lots of credit and are planning to take on big debts. It can stamp you with high credit risk. However, soft inquiries are when you, a marketer or an employer request a credit check. Ensure that the lender run your credit when you agree to the lending options. Moreover, multiple credit checks will leave bad impression on the lender. Old inquiries are eliminated from the report after two years.

• Open credit accounts: All that readily available credit which you found lucrative due to free gifts can downgrade your financial image in the eyes of lenders. You might have forgotten about that credit, but it all aggregates towards the available credit. According to the two out of the three official free annual free credit report providers, Transunion and Experian, an individual should never close the oldest card as it signifies history. The free credit report agencies also suggest shutting off the accounts which are not used.

• Missed payment: One should try paying the minimum payment, or consolidating accounts to reduce payments. All the failures are integrated into the report for seven years. Missed payments leave bad effects on your credit report.

• Exceeding credit lines: This is another reason that will put your financial condition at stake, and also discourages lenders from providing any monetary aid. Experts suggest moving debt off one exceeded card to another card whose limit is yet not maxed out. Playing this way you can improve your credit score.

• Debt in relation to income: You will not be provided with the best deal if you have unsecured credit card debt exceeding more than 20 percent of your annual income. There are high chances that you may get high interest rates and your wise move of reducing the debt to income ratio will get you better rates on the loans.

So, ensure your activities are not hampering your credit report. It is better to check your credit report more often and keep track of it. Maintaining financial health is very important these days, so that credit scores can be improved.