Handle Your Bad Credit To Get Your Loan Approved
It's very rare to find people who, at some point in their lives, didn't have credit problems that cause their credit score to fall dramatically. If that's your situation, but yet you're itching to realize at least the "homeowner" part of the American dream, then you'd better start reading about credit scores and the such because that's going to be the factor that will weigh the most of the eventual approval of your mortgage loan application.
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.
It's surprising to see how many people try getting a loan without knowing what their credit score is. In the case of mortgage loan, the score most widely used by lenders is the FICO score, named after Fair Isaac & Company, which is the company that calculates the score. Your credit score summarizes your credit history in one number and that number guides lenders in their loan approval decisions.
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.
In case you didn't know it or it slipped out of your mind, you have three credit scores, not one. Because all three credit bureaus work independently, and because there's no legislation requiring that credit information be reported to all three bureaus, your credit file will vary from one to the other. The only way to get as accurate a snapshot of your credit profile as possible is to order your credit score from each one of them.
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.
A poor credit record often results in people telling themselves that now that their credit is in the dumpster, all hope is lost. So they see no benefit in trying to understand how the credit scoring system works. It can pay great dividends to find out more about it when dealing with, for example, sub prime mortgage lenders. You will find yourself able to negotiate better deals with them or you might just try to improve your credit so you can get better loan terms altogether. When it comes to financial matters, ignorance is definitely not bliss.
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.
It's surprising to see how many people try getting a loan without knowing what their credit score is. In the case of mortgage loan, the score most widely used by lenders is the FICO score, named after Fair Isaac & Company, which is the company that calculates the score. Your credit score summarizes your credit history in one number and that number guides lenders in their loan approval decisions.
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.
In case you didn't know it or it slipped out of your mind, you have three credit scores, not one. Because all three credit bureaus work independently, and because there's no legislation requiring that credit information be reported to all three bureaus, your credit file will vary from one to the other. The only way to get as accurate a snapshot of your credit profile as possible is to order your credit score from each one of them.
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.
A poor credit record often results in people telling themselves that now that their credit is in the dumpster, all hope is lost. So they see no benefit in trying to understand how the credit scoring system works. It can pay great dividends to find out more about it when dealing with, for example, sub prime mortgage lenders. You will find yourself able to negotiate better deals with them or you might just try to improve your credit so you can get better loan terms altogether. When it comes to financial matters, ignorance is definitely not bliss.
About the Author:
If what you need is a specific type of bad credit loan, such as for example to buy a house with bad credit in ATL, please drop by my personal finance blog where you'll find plenty of sensible financial advice..
posted by Debt Consolidation Loan at
4:22 PM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home