Unless you have no connection to the outside world, then I’m sure you are fully aware of the credit crisis we are experiencing in this country. This credit crisis essentially has happened because loans were granted to people that could not afford them. That being said, does that mean that if you have bad credit there is no way to get a loan or credit card? NO. You can still get loans. There are a lot of people that have bad credit that really can afford the loans for which they are applying, but they are paying for mistakes of their past or they recently went through a divorce, medical emergency, or some other life-altering condition that caused the bad credit. If you are one of these people, you need to get started repairing your credit. If you have the time to do it yourself, that’s great. If you don’t, then you may want to consider paying for credit repair service. I recommend Lexington Law; you can find a link on our site to them. I personally have used them, and I think they offer a very fair-priced and effective service.
Make Sure You Qualify
Now, as far as getting a loan with bad credit, there are two things that you need to do. First, you need to specifically ask companies whether or not they do loans for people with bad credit. Don’t waste your time and hurt your credit score more by getting rejected by multiple banks. Just ask them whether or not they do loans for people with bad credit and ask them what the qualifications are. I don’t ever apply for anything that I don’t already know I will be accepted for. I bring in my credit reports and scores from all three bureaus (look up my post on credit monitoring). I show the loan officer what I have, and let him determine whether or not I would be accepted before I give them the ok to run my credit and so forth. I think this is essential. It is also essential to be very forward with people if you have bad credit.
If you have bad credit, let any bank or mortgage broker know that up front. Tell them you have bad credit and ask them if they can deal with you. If they say yes, then you need to find out how they qualify applicants. For many people, they just go strictly off of your F.I.C.O. score and income. You want to talk to someone that will manually underwrite your loan. This means that they will be willing to hear your explanation of the bad credit and judge personally whether or not you can make the payments instead of just categorize you based on numbers.
Bad Credit and Credit Cards
The same rules apply concerning credit cards. Make sure that the card company has programs for people with bad credit, and decide whether or not you’ll be accepted for such a program before you apply. Remember, every time you allow your credit to be run, it will hurt your score. It may not decrease it much, but it will decrease it some; and the more inquiries you have, the more than tend to negatively impact your score. If you absolutely cannot get a card, then apply for a secured credit card. You will have to deposit money to secure your account, but the card will report to the bureaus the same way any other card company would do, allowing you to improve your credit and add a positive account history to your report.
Bad Credit and Your Terms
Remember, just because you can get a credit card or a loan with bad credit, don’t become complacent about improving or correcting your credit score. Do everything you can to have a solid score (680+), because your options and terms for credit will improve greatly if you have a good score. Don’t be a victim to lenders that prey on people with bad credit. I do real estate investing as a hobby, and I recently bailed out a homeowner that was paying 18% interest on his second mortgage. He couldn’t do it any longer, and he was going to lose the house because of it. Just because you might get accepted, this doesn’t mean you should go forward with it. Review the terms and be wise about what credit obligations you take on.
And Finally, you can always fix bad credit. Look at this post for information about disputing your bad credit history. If you don't have the time hire Lexington Law Firm