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Smart Tips for Subprime Loan Borrowers

After submitting a loan application to your chosen lender, you have been informed that you are not qualified for an approval due to a poor credit rating. Obviously, you have submitted your application to a lender that only accepts customers with good credit. Perhaps you thought that your credit rating is good enough to pass. Unfortunately, it wasn’t. So, what can you do?

If you really need to acquire a loan due to a financial emergency, then you can look for a lending company that extends loans for people with imperfect credit rating. These lenders are also called subprime lenders and they are more lenient in approving loans compared to other loan providers.

Thus, before submitting a loan application, check your personal credit report and if your credit score is 620 or below, you should look for loans in the subprime category. Nevertheless, some subprime loan companies may take advantage of your situation and charge you with high interest rates and expensive fees. If you’re not smart with choosing your lender, you could end up with an unreasonable loan deal.

Listed below are practical tips that are specially intended for people in search for a bad credit loan:

Check your credit report. Order a copy of your report from each of three major credit reporting agencies (Trans Union, Experian and Equifax ) so you can personally check your credit standing. Check your report for errors which can hurt your score even more. In case there are errors, send a letter of dispute to the credit reporting agency that issued your report to have the incorrect items corrected.

Compare bad credit offers. Of course, subprime lenders offer different rates and to find the most reasonable deal, you must spend time comparing your options. Use the internet to check out the available loan programs especially offered for people with bad credit history. Expect subprime loans to have higher interest rates than loans that require good credit. Nevertheless, you should never settle for an unreasonable deal. By investigating your available options, you can be assured that you can choose a bad credit loan with the lowest possible rate.

Carefully evaluate your loan contract. Spend time reading and understanding each and every statement in your loan contract. Check for hidden fees as well. If there are terms or phrases in the document that you do not fully understand, do not hesitate to ask for a clear explanation. If the lender cannot give you a straight and clear answer to your questions, it’s best to find another.

Improve your credit score. Use your subprime loan to work for improvement. By submitting your monthly loan payments religiously on time, you should be able improve your credit score within six month after your loan’s approval. Order a copy of your credit report from the three credit bureaus to make sure that you are doing progress. Continue with your good payment habits not only with your lending company but with all your other creditors as well. After a year of consistent payments, you should be able to regain good credit history and refinance your loan to enjoy lower interest.

Not Sure Where To Start Repairing Your Credit? These Tips Can Help!

Having terrible credit can affect your daily life in a number of ways. It’s harder to own a home and interest rates are higher on cars, insurance and a number of other purchases. If you’ve had a hard time keeping your credit rating up, here are a few tips to get your credit back in good shape.

One of the best ways that you can do in order to keep a good credit score is to pay for a monthly copy of your credit report. This will allow you to see all the activities done with regards to your credit. If something does not look right, you will be able to dispute it before it is too late.

Every time someone inquires on your credit report, your score will go down for a short time. This is to discourage people from applying for a ton of credit accounts at the same time. Try to apply for only a few accounts while repairing your credit score, and do so at long intervals.

Always keep your bank accounts, your tax payments and your utility payments in order and timely. The way in which you manage these necessities reflects strongly on your credit rating. Falling behind on your obligations and having overdrafts at the bank negatively impacts your daily life and makes it more difficult to get credit.

If you are in the midst of repairing your credit and find that you are having difficulty paying bills on time due to financial stress, call the financial institution and see what options there may be for you. You may qualify for an economic hardship deferment of a loan or for reduced payments. You never know unless you ask!

When you are working to improve your credit, do not rely on debts falling off of your credit report. While it is true that debts recorded on your report can expire, the process takes many years. Serious debts are likely to be referred to collection agencies, as well, making them impossible to ignore. It is better to face up to the fact that you will have to pay off the legitimate debts on your credit report.

Use your credit cards to pay for daily expenses. You can repair your credit by using your credit card to pay for the small things you buy everyday such as gas and food. Make sure to pay the bill in full every month of course; this kind of regular payment in full is very good for your credit score.

A great tip to improve your credit score is to avoid excess credit. Having multiple lines of credit and racking up huge debt on that credit is a recipe for disaster. It shows that you have more debt that you can deal with and will significantly lower your credit score.

An important tip to consider, when working to repair your credit, is how applying for a loan will affect you. This is known as a “hard” inquiry on your credit report. However, you will take “less of a hit” if you group these inquiries into a short amount of time, as opposed to, spread out over a couple of months.

As you learned throughout this article, repairing your credit score is a careful blend of knowledge and action, with knowledge obviously being the more important factor. Once you learn how to repair that score, it’s up to you to take the action necessary to leave that bad credit behind you for good.