Handle Your Bad Credit To Get Your Loan Approved
Having a poor credit record doesn't necessarily mean that you're going to have to be a renter for the rest of your life. On the other hand, what it does mean is that you're going to have to educate yourself about credit scores and their impact on mortgage loan rates.
Bad credit lenders are all over the place. They compensate for taking on bad credit lenders by charging them high interest rates. So it might be quite a challenge getting a somewhat reasonable offer from one of them. But no matter what, be prepared to hand over a lot of documentation as a way for them to try and assess what kind of risk you represent.
Fair Isaac & Company (better known as FICO) is the leading company when it comes to calculating and assigning credit scores. Their score (the FICO score) is the one most often used by lenders. Knowing your FICO score gives you a pretty good idea of how prospective lenders will view your credit application and whether or not it has a good chance of being approved.
There are a variety of scores used by different financial institutions. Credit card companies have their variants, and so do insurance companies and car loan lenders, just to name a few examples. What doesn't change, though is this: the higher your score, the better you look. In all cases, the higher your score, the more likely your application will be approved and the better terms you will get.
You might be surprised to learn that you have more than one credit score. That's right! You have three of them, as each credit bureau has their own. While common sense might dictate that they'd all be identical, it's absolutely not the case, because the companies that report our credit activity aren't required to do so to all the bureaus. In order to get your complete credit profile (and not 1/3 of it), you should get your score from all three bureaus.
Another thing to look out for is errors on your credit report. The figures vary by a wide margin, but the consensus is that a large proportion of credit reports carry errors. When you get your credit report, go over it line by line to spot any errors and/or omissions. Highlight anything you spot and make sure you contact the credit bureau to have it corrected. Followup one month later to check if your report has been updated.
Often times, once people find out that their credit is shot, they pretty much give up on the credit system entirely and don't even bother trying to understand how it works so they can turn things around. The problem with this attitude is that their credit remains bad. But if they had taken the time to educate themselves, they could have made better financial decisions for their future, either by being more savvy when looking for a bad credit loan, or by doing what it takes to improve their credit and be eligible for a standard loan.
Bad credit lenders are all over the place. They compensate for taking on bad credit lenders by charging them high interest rates. So it might be quite a challenge getting a somewhat reasonable offer from one of them. But no matter what, be prepared to hand over a lot of documentation as a way for them to try and assess what kind of risk you represent.
Fair Isaac & Company (better known as FICO) is the leading company when it comes to calculating and assigning credit scores. Their score (the FICO score) is the one most often used by lenders. Knowing your FICO score gives you a pretty good idea of how prospective lenders will view your credit application and whether or not it has a good chance of being approved.
There are a variety of scores used by different financial institutions. Credit card companies have their variants, and so do insurance companies and car loan lenders, just to name a few examples. What doesn't change, though is this: the higher your score, the better you look. In all cases, the higher your score, the more likely your application will be approved and the better terms you will get.
You might be surprised to learn that you have more than one credit score. That's right! You have three of them, as each credit bureau has their own. While common sense might dictate that they'd all be identical, it's absolutely not the case, because the companies that report our credit activity aren't required to do so to all the bureaus. In order to get your complete credit profile (and not 1/3 of it), you should get your score from all three bureaus.
Another thing to look out for is errors on your credit report. The figures vary by a wide margin, but the consensus is that a large proportion of credit reports carry errors. When you get your credit report, go over it line by line to spot any errors and/or omissions. Highlight anything you spot and make sure you contact the credit bureau to have it corrected. Followup one month later to check if your report has been updated.
Often times, once people find out that their credit is shot, they pretty much give up on the credit system entirely and don't even bother trying to understand how it works so they can turn things around. The problem with this attitude is that their credit remains bad. But if they had taken the time to educate themselves, they could have made better financial decisions for their future, either by being more savvy when looking for a bad credit loan, or by doing what it takes to improve their credit and be eligible for a standard loan.
About the Author:
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posted by Debt Consolidation Loan at
4:22 PM
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