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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.
Debt Management: How You Can Master Your Debts
Managing numerous debts, when you hear it, seems like a Herculean task. But it is not. It is in fact easy to do it once you find out about the numerous programs that are dedicated to this purpose. Their common goal is to help you undo the shackles that your unpaid debts have probably placed upon you. They exist under a single banner- debt management.
Debt management is a program that can make repayment of your multiple debts an easier process. It functions in a simple way. All the debts that you have are merged into a single one. These may be credit card debts, huge unpaid bills or unpaid personal loans. This new consolidated debt can be paid off at an interest rate which is lower than you original rates. Now that you have a single debt, you can make a single payment to a singe creditor who will distribute it among your other creditors.
Through debt management, you get to avail advantages like these:
* A more manageable repayment method * Lesser overall payment * Some money can also be saved for use in other purposes.
Debt management can be easily achieved with the expert help of debt management agencies. Apart from the usual features, you also get valuable guidance as to how to manage your personal finance and regulate your expenditures so that you dont have to fall into debts again in future.
Debt management can also be achieved through the following forms, depending upon the seriousness of your debt status:
Debt consolidation: when your total debt crosses £5000 and you owe to two or more creditors. All you debts will be consolidated and a loan will be given to help you pay off the consolidated debt. Debt negotiation: when you cannot make the minimum payments. Your total debt amount is substantially reduced, sometimes by half. Debt elimination: when the only other option remaining is bankruptcy. Interest rates are reduced on all debts except one which can be paid off with the extra money saved from the other reduced payments.
Debt management, no matter which option you go for, certainly frees you off your debts.