You may think that the only thing lenders look at when they check your credit report is your credit score. But in actuality, lenders tend to take a more holistic approach by looking at a borrower’s entire financial picture. And while each lender has its own particular process for determining a potential borrower’s creditworthiness, there are some common types of data that you can reasonably expect lenders to analyze when you apply for new credit.

What do lenders look at on your credit report?

Beyond your credit scores, lenders look at your credit report for data points that help them understand your risk as a borrower. When you apply for new credit, lenders want to know how you’ve used similar credit before. If you are seeking a new auto loan, for example, auto lenders want to see how you handled previous auto loans. Did you have late or on-time payments? Have you ever had your car repossessed? This type of information may indicate to lenders how you might handle new credit.

Lenders often consider the impact the loan might have on your financial situation. If they think you can’t afford it, they might deny your application even if you have been successful in paying off loans in the past. If you are applying for a consolidation loan that would bring several debts into one payment, they’ll likely assess whether your total debt payments will become more or less manageable.

Payment history

Your payment history is usually the most important metric lenders look at when deciding whether or not to extend credit to you. Here are examples of questions lenders may ask when reviewing your payment history:

  • Are you making all of your payments on time?
  • Do you currently have any delinquent accounts (i.e., accounts that are more than 30 days overdue)?

These are important questions for lenders, who view recently missed payments as evidence that you may be having trouble managing your current credit and are therefore more likely to have issues in the future. However, one late payment on one account is far less impactful than being late multiple times or on multiple accounts. Ultimately, lenders are looking to see whether or not you have a history of paying your bills on time.

Credit patterns and usage

Patterns are important, and patterns in your credit report tell a story. Lenders will look at the story to see how you use your credit. Your credit usage, or credit utilization, is a measure of the credit limits on all of your open and active accounts compared to how much you currently owe on each. Paying your balance in full indicates you are in control of your debt, regardless of your credit utilization rate. Similarly, carrying a balance, especially if your utilization rate is high, may indicate to a lender that you’re more risky. A history of consistently low credit usage tells lenders you can use credit responsibly and aren’t likely to max out credit cards or default on payments.

Current credit obligations

What percentage of your stated income do you use to make payments on your credit accounts each month? This is your debt-to-income ratio, and it’s important because it’s another good indicator of your ability to repay any credit extended to you.

Accounts in collections

Outstanding collections accounts — i.e., accounts that have been sent to a third party because you’ve fallen behind on payments — will likely be viewed by any lender who checks your credit reports. However, paid collections may or may not be ignored by the lender. Paid or unpaid, collections accounts can stay on your credit report for seven years (though worth noting that paid medical collections will soon be removed from credit reports).


A bankruptcy will almost always negatively impact your credit score, and thus your ability to obtain credit. Depending on the type of bankruptcy, it can remain on your credit report for seven to ten years. This doesn’t mean you can’t get credit while a bankruptcy is still on your credit report, but it makes your post-bankruptcy actions handling credit important for lenders to see.

New credit inquiries and recent activity

When it comes to how lenders view new credit applications, the short answer is: it depends. If you’ve recently applied for the same type of credit multiple times within a short window, such as a car loan, lenders understand that you’re simply shopping for the best rate and are often content to view these checks as a single inquiry. However, if you’ve submitted multiple credit applications for multiple types of credit over a longer period, such as six months or a year, many lenders will view it as a sign that you may have trouble paying your bills.

Length of credit history

If you have long-held credit accounts that are in good standing, that signals to lenders that you have a history of financial stability and are less likely to default on credit. In general, it takes about six months to “establish” your credit, and one year of solid payments can help you build a good score. However, having one or more accounts for more than five years is good, though an even longer history of positive credit usage is more helpful on your credit report.

Which credit scores do lenders review?

When lenders do a credit check, they typically access your information via the three main credit bureaus: Equifax, TransUnion and Experian. Each bureau draws on its own network of lenders and creditors to create the credit reports they provide. Because not all bureaus receive the exact same information about your credit usage, your data across the three bureaus may not be identical. However, it’s similar enough to provide lenders with the bigger picture in terms of your overall credit profile.

Not only does each lender have its own set of criteria, but they also utilize specific credit scoring models based on the type of credit you’re applying for. For instance:

If you’re applying for a mortgage loan:

  • The lender will almost certainly get a credit score from all 3 major bureaus.
  • The FICO scoring models commonly used for mortgages are 2, 4 and 5. Each number corresponds to a particular credit bureau: 2 = Experian, 4 = TransUnion, 5 = Equifax.

If you’re applying for an auto loan:

  • FICO 8 Auto is commonly used for auto loans, and it’s available from all of the 3 major credit bureaus.
  • This is a specialty credit score with a range of 250-900 instead of the more common 300-850 range.

If you’re applying for a personal loan:

  • A personal loan lender is likely to take a look at your FICO 8 score or VantageScore 3 — or both — from one or more credit bureaus.

Regardless of the score chosen, the lender will use it as a starting point for determining if they consider you a good candidate for credit. But it’s most likely not the only criteria the lender will have.

Aside from your credit score and report, what else do lenders look for?

Your credit report and score give lenders insight into your financial habits, health and history. However, many lenders look at additional types of data to get a fuller picture of your overall financial stability. Here are a few additional factors lenders may consider.

Employment history

Your employment history is of particular interest to mortgage lenders, who are interested in your long-term income stability. If you have large gaps in your employment or have recently been unemployed, you may have a harder time getting a loan — or you may simply be charged a higher interest rate.

Length of time at residence

The longer you reside in one place, the less likely lenders will see you as a credit risk, since it’s usually an indication that you’ve successfully been making rent or mortgage payments.

Professional occupational licenses

An occupational license is a government (usually state) credential you must earn to perform a particular job. Lawyers, doctors, plumbers and hair stylists are just a few professions that require such a license. For many lenders, an occupational license is a good sign that a potential borrower has and will continue to earn a stable income.

Cell phone number

Lenders like to see that you’ve used the same cell phone number for a long time, and have used it on previous loan applications. Why? Because an applicant who has used many different numbers may have failed to pay previous phone bills. In short, it’s just another way for lenders to assess your financial stability.

What factors do lenders not look at when considering you for a loan?

There are certain characteristics that lenders are prohibited from using in deciding whether to make you a loan. The Equal Credit Opportunity Act (ECOA) was enacted to prevent lenders from discriminating against potential borrowers based on factors unrelated to their ability to repay a loan. Specifically, lenders can’t deny you a loan based on your:

  • Race and/or nationality
  • Religion
  • Level of education
  • Sex and/or gender
  • Age
  • Marital status
  • Participation in public assistance

Understanding the lender's point of view

Your credit report is a compilation of facts and history that tells lenders the story of your credit usage. Knowing what financial and personal data lenders take into account when you apply for a loan can help you better understand the process — and be better prepared the next time you apply for a loan.