Tag Archives: accounts
What is a bad credit loan? (Page 1 of 2)
Bad Credit Loans
A bad credit loan is a type of loan that is offered to individuals that have poor credit.
How do you know if you have bad credit?
First, before you apply for a loan, you should write the credit bureau to get a copy of your credit report.
How can you tell if you have bad credit?
If you are receiving calls from a collection agency, you have bad credit.
You have bad credit if you have three or more late payments on your credit report.
But there is more!
You also have bad credit if you have any of the following on your credit report:
Unpaid closed accounts. This could be credit cards, auto loans, home loans, apartment lease, cellular phone, cable bills and much more.
Any account that is closed and was not paid off will show a charge off on your credit report.
This is one of the worst items that you can have on your credit report. It tells the person that checks your credit that you will never pay off the bill.
You can also get bad credit by co-signing for another person.
For example, you could co-sign for a person to get a new car, loan or apartment. If the person you co-signed with is ever late of a payment, that would cause you to have bad credit.
How To Clean Up A Bad Credit Report
If you would like to clean up or repair your credit, your first step is to order your credit report.
Once you have received your report, you should either pay off any unpaid bills on your report or contact the account holders to make some type of payment arrangement.
It is always better to pay the bill off if possible. If you owe a large amount of money, you may want to contact a debt consolidation service.
For a small fee, they would contact each account holder to work out a payment plan that you could afford.
They would combine all of your bills into one monthly payment. This service would improve your credit history over time.
If all of your accounts are paid off and still show a history of late payments, you could hire a credit restoration service. Credit restoration or credit repair companies can contact the credit bureau to try to get them to remove the late payments from your credit report.
These types of services can only help you to clean up your credit history if you have already paid off your accounts. The reason why your account must be paid off for a credit repair company can be able to help you, is because the credit repair service will send a letter to the credit bureau requesting to have all the negative items removed from your credit report.
The credit bureau will send all your account holders a letter stating that you would like to remove the negative information that they sent to the credit bureau about your account. If your account holder does not respond to the credit bureau’s letter, the credit bureau would have to remove the information from your credit report. There is a much better chance that the account holder will not respond to the credit bureau if your accounts are closed and paid off. If your accounts are not paid off, the account holder knows if they respond to the credit bureau, the negative items will stay on your credit report.
Business Startup Loan – Negotiations, Thieves, and a Pot of Gold
Small business startup loan, lets keep this simple. If you are trying to get a larger loan (one over $100,000), then you will probably need collateral. You probably already knew that. But what you may not know is that for some smaller loans, you may be able to get by with several other alternativeshome equity and unsecured loans. You may even be able to negotiate your accounts receivable as a form of collateral if none of the other options work. The government provides several programs to help you as well.
USE THE MONEY IN YOUR BACKYARD
If you have no collateral and your lenders require it, you may be able to convince them to use your home equity as collateral. This should be exciting news for all of you homeowners that are starting businesses with less than sterling personal credit. However, this tactic will not work if you have already borrowed significantly against your home equity.
TAKE THE THIEF APPROACH (LIKE BANKS DO)
You may not understand why you need collateral for smaller small business startup loan amounts when you are already paying interest for borrowing the money. This is a perfectly good question. And the answer is simple: for small amounts, they dont. So either find a lender that provides unsecured small business startup loans or convince traditional lenders to give you money without requiring collateral. If you are looking for $15,000 or less and your preferred lender will not do the deal without collateral, make like a thief and run (to the next lender.) Just dont do anything illegal on your way out.
TAKE THE MONEY FROM YOUR CUSTOMERS POCKETS
Instead of trying to use assets you dont have, try using the cash that customers already owe you. Some banks let businesses use accounts receivable as a form of collateral instead of real estate or other assets, so if your banks primary objection is your lack of collateral, negotiate to see if they will accept accounts receivable. This may reduce the amount a lender feels comfortable providing, but any number is better than zero when you are desperate.
CALL YOUR UNCLE SAM
If all else fails, ask lenders if they can distribute SBA funding. The 7(a) Guaranty program can help allay their doubts for larger small business startup loans, and the Microloan program can help for start up loans. You must qualify for these programs, so do some research about the SBA loans to make sure you are eligible. Be aware that even if you qualify and are approved for an SBA loan, banks can still choose not to loan money to you.
Some states have grant programs to foster business growth. Consult your local chamber of commerce for information about those or use the internet for additional information.
DONT GIVE UP
If you are completely out of options, keep a positive attitude. Learn from your mistakes and do everything in your power to correct them as soon as possible. If you do this, the small business startup loan check will appear in your bank someday. In the meantime, maybe one of your family or friends will decide your business is great and provide some funding. You never where a pot of gold may be hidden!