Please Explain in One Sentence What Makes you a Good Credit Risk for this Loan?

Lenders often allow you a chance to qualify for a loan with this simple question: “Please explain in one sentence what makes you a good credit risk for this loan.” If you respond incorrectly, you could ruin your chances.

What Lenders are Looking For

Lenders are looking for signs of responsibility and financial strength. Here are some potential ways to convey your creditworthiness to a potential lender:

  • I recognize my need for more reliable transportation.
  • I have steadily improved my credit rating by making on-time payments and paying off debt.
  • I have been steadily employed for the past 5 years.

Warning Signs

Just as lenders are looking for appropriate reasons to grant you credit, they are also looking for reasons to deny your loan. You may want to avoid using responses similar to these:

To qualify for a loan, you typically need to convey to your lender two facts. First, you need to convince them that they can reasonably expect you to repay the loan as agreed. Second, you will need to show that you are making a good choice by requesting the loan for a valid purpose.

Of course, the above truths do not apply to predatory products like payday loans and other high cost short-term loans. Title loans also can be exempted from the above, since these predatory lenders expect for you to default and lose your collateral.

If you think you need a loan due to one of the warning signs above, then understand that you do not need a loan, nor can you be expected to be able to afford the loan. Instead, you might want to consider seeking help from a credit counseling or social services agency.

Kenneth Long
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Kenneth Long

President at Debtors Unite
Kenneth Long is President of Debtors Unite, Inc. as well as President and Vice Chairman for Vision Credit Education, Inc. He served as a regional coordinator for the North Carolina Saves campaign. Long co-founded the Wake EITC Coalition along with Family Resource Center of Raleigh.

Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.

Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.

In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.

Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!

Favorite quote:

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

Thomas Jefferson
Kenneth Long
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