What Do You Need for a Pre-Credit Report?

According to Credit History Care, pre-credit reports are something that potential employers and lenders often perform to analyze an individual's credit history to gauge financial stability and responsibility. It also consists of individuals sitting down with a lender and going over income and expenditures to determine what type of financial options are available. According to Credit.com, pre-approval is an essential step to getting a loan. Becoming pre-approved is essentially a lender's unofficial promise that you're qualified to borrow a certain sum of money. There are several things you need to present to gain pre-approval.

Pay Stubs

In order to be approved for a loan, the lender must know that you are able to pay it back. That's why you need to present your most recent pay stubs to the lender while you meet about receiving pre-approval. The loan amount that you will qualify for directly correlates to your household income each month. For example, a house that earns $2,000 per month won't qualify to borrow as big of a loan amount as one that earns $10,000 per month. When purchasing something like a car or home, payments are typically made over a number of years, so the lender must know that you'll be able to pay back the loan amount over time, as well.

Tax Returns

According to Credit.com, another thing needed for pre-credit approval is tax returns and W-2 forms for the past two years. This lets the lender know that you've been properly filing and paying taxes. It also gives the lender an idea of whether or not additional household income is put toward paying any additional taxes each year, which could affect the loan amount a customer qualifies for.

Bank Statements

Bank statements let a lender know how much of a household's earnings go toward monthly expenditures. This gives the lender a better idea of whether the customer will be able to provide the monthly payment that often comes with a loan. It also allows the lender to look into the savings accounts of customers. This helps them recommend a down payment, which is often required when financing things like a car or home. Other things you might be required to present include stocks and investment information.

Large Expenditures/Additional Income

Other things to bring to a pre-approval meeting are records of large expenditures -- such as cars or properties that are presently being paid off -- and documentation of credit card balances and student loan debt. These factors all help the lender judge what type of loan you best qualify for based on what expenses your money goes toward each month. Additionally, if a customer has a second job or earns Social Security benefits, documentation should be presented to the lender.