Understanding Bad Credit Lenders
What if you need a bad credit lender? Do you know what one is, or what kind of credit is "bad", in the first place? Well, for starters, standards for what constitutes bad credit can vary from credit bureau to credit bureau. It's generally accepted, though, that credit is deemed bad when it sinks below a 500 score as ranked by the Fair Issac Credit Organization (FICO).
How Credit is Determined: There are several credit scoring agencies out there that most lenders rely on. Equifax, TransUnion, and Experian are the top three. Somehow, even though all three have different standards for scoring a person's credit, they all seem to be pretty close to each other. We do know that these agencies use a number of different factors when deciding scores.
Lenders Who Specialize in Bad Credit: Most lenders of this type deal in the sub-prime finance markets. This means that any loans you take from from them can be a bit costlier, overall. But a need exists, because even persons of good character can run into challenging credit situations. In tough times, bad credit lenders can do a lot of business.
Lender Interest Rates: Because these kinds of lenders deal in sub-prime finance markets, the cost of the money they may lend to you is going to be more dear. Interest rates can range from only a few points above prime to near the legal interest limit. If you think you're going to need a high-interest, "bad credit" loan, do some research before you get on.
Lavish Service Fees and Rates: Watch that a sub-prime lender isn't tacking on phony or excessive late fees or other charges. Also, watch for increases in interest rates with little or no notification from the lender. Still, honest sub-prime lending will always have a place in good times and bad.
How Credit is Determined: There are several credit scoring agencies out there that most lenders rely on. Equifax, TransUnion, and Experian are the top three. Somehow, even though all three have different standards for scoring a person's credit, they all seem to be pretty close to each other. We do know that these agencies use a number of different factors when deciding scores.
Lenders Who Specialize in Bad Credit: Most lenders of this type deal in the sub-prime finance markets. This means that any loans you take from from them can be a bit costlier, overall. But a need exists, because even persons of good character can run into challenging credit situations. In tough times, bad credit lenders can do a lot of business.
Lender Interest Rates: Because these kinds of lenders deal in sub-prime finance markets, the cost of the money they may lend to you is going to be more dear. Interest rates can range from only a few points above prime to near the legal interest limit. If you think you're going to need a high-interest, "bad credit" loan, do some research before you get on.
Lavish Service Fees and Rates: Watch that a sub-prime lender isn't tacking on phony or excessive late fees or other charges. Also, watch for increases in interest rates with little or no notification from the lender. Still, honest sub-prime lending will always have a place in good times and bad.
About the Author:
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posted by Debt Consolidation Loan at
2:36 AM
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