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Fixing Your Credit Yourself
Fixing your credit yourself doesn’t have to be as hard as it’s made out to be. If you’ve been turned down a few times because of your low score it’s easy to start feeling like you’re doomed forever, but the truth is that there are many small changes you can make that will have a huge impact.
Before you can do anything you need to get a copy of your credit report, which you can do free (once a year) online. Your score is calculated based on information in this report, so you’ll need this to know what you need to work on.
Probably the biggest thing you can do to help yourself, that takes a bit more effort and time for most, is to pay down any balances you have open. This will go a long way towards fixing your credit. Of course, many don’t have the option to do this immediately, but over time this is the best thing you can do to help yourself.
Once you have your report the first thing you’re going to want to do, because it is the easiest and fastest, is check over your report for mistakes. We’re not really interested in things like misspellings of your name, we’re looking for accounts you have paid off in full marked open, or overdue. An important factor in calculating your score is the ratio of the credit you’ve used, versus that which is available to you. Look at where your card limits are listed and check to see if they’re correct, if they are marked as lower you’ll want to have this fixed. Any mistakes you find you can call and ask companies to change them, if they’re unhelpful keep calling until it gets fixed.
As a general rule, on a month to month basis, I recommend using less than thirty percent of your limit on your cards, and paying them off in full each month. This will give you a healthy record of using your finances sparingly and carefully.
While there, of course, more things you can to help fix your credit yourself, these steps will give you a good running start.
Are Bad Credit Re-Mortgages Impossible?
So many of us feel that having bad credit will make a re-mortgage impossible or very close to impossible to say the least. With so many of the traditional lending institutions not even wanting to speak to us, slamming the proverbial door in our faces before we can open our mouth to speak our case, very few options seem to be left. But there is hope- and yes, a bad credit re-mortgage is 100% possible! You just need to look beyond the banks, a ways past the non-traditional lenders.
Believe me, potential creditors dont care why your credit is poor, just that it is – so you dont feel the need to explain. Some of us have gone through the unpleasantness of a divorce, creating a drop in finances and related credit score. Others lost their employment and have fallen behind on their bills. Still others had to file bankruptcy for one reason or another. Whatever your situation, you just need to find a quality, sub-prime mortgage lender!
Sub-prime mortgage lenders specialize in people like us, both for refinancing a current mortgage (also known as a re-mortgage) or buying a new home. Of course, there are a few things you should be aware of before you take advantage of one of these loans.
First, you should know that the lower your credit score, the more your re-mortgage is going to cost. The current industry average (sub-prime/bad credit re-mortgage industry) is 4%, but can go as high at 7%. This means that you, as a bad credit home loan borrower, are typically charged an average of 4% more than a borrower with good credit thats getting into the same general loan program. This percentage can be in charged in a bunch of different ways, including interest, points, and a wide variety of bad credit fees.
Dont think that the types of mortgages that you can qualify for are extremely limited, because you couldnt be more wrong, theyre just going to cost you a bit more. You can even apply for a mortgage that allows you to take out extra money to pay off high-interest credit card bills and auto loans, if thats what you need to help your financial situation!
Of course, your interest rate will also reflect your LTV, or Loan to Value ratio. This number stems from the amount your home is worth and compared to the amount of the loaned mortgage amount. The higher the loan amount to your homes worth, the more you will pay each month. This is true of all mortgages, no matter what you credit score may be.
Before signing any re-mortgage agreement, be sure to shop around to get the best deal. This will also keep any predators at bay from trying to take advantage of you as you re-mortgage your current home loan!