Posts Tagged Credit Score
Credit Restoration: A New Lease on Spending and Saving
Posted by Owen in Credit Repair on November 23, 2010
It can seem like a monumental task if you take it upon yourself to restore your credit. Of course, there are credit restoration services that can help you in this regard. Nevertheless, understanding the process can better help you to organize yourself so you can improve your credit standing. Whether your credit woes were a result of being laid off or because of non-pays or late pays, or even if you’ve been faced with numerous charge-offs you can regain what you’ve lost with time and forethought.
Take a Look at Your Credit History
The first thing you’ll want to do if you plan to restore credit is to obtain your credit report. Obviously, this is a vital piece of information if you want to make any headway in giving your credit score a boost. Obtain a report from each of the three credit bureaus – Experian, Trans Union and Equifax. This way you can decipher the information and make sure it appears the same on all three reports. It will also give you the opportunity to dispute any errors and make corrections on the reports. If you have an inaccuracy, you’ll need to submit correspondence to dispute the erroneous data on the report. You can also do this online. By having all three reports on hand, you can get a full picture of your credit situation and how it can be ameliorated.
Behavior Modification
Once you’re apprised of your credit situation, you’ll need to take the appropriate steps to alter your past behavior with respect to spending and saving. Make it a priority then to do the following:
(1) Reduce your credit card debt by paying off your high interest credit cards first and maintaining the monthly payments on your lower interest cards.
(2) Don’t apply for any more credit as inquiries can lower your credit score. Instead, concentrate on reducing your debt and making timely payments.
(3) Make sure you make your auto and housing payments in a timely manner. Don’t give yourself any reason to default if you possibly can.
(4) Reduce the amount you’re paying on your automobile or mortgage by considering the option of refinancing. The savings you’ll reap by paying a lower APR can help you manange your money so you can pay off current debts and invest in savings.
(5) Establish a regular savings routine. Get into the habit of making the most of what you make; therefore, learn to save for specific purposes and you won’t throw it all away.
(6) When using your credit cards, don’t exceed your credit limits. Don’t be tempted to use your credit cards on items you don’t really need.
Reduce your Amount of Credit
It can take time but if you’re consistent in changing how you spend and save, you’ll eventually see your way clear monetarily. If you make it your aim to lower the amount of credit you use to a couple credit cards, you’ll be able to realize a greater deal of financial freedom. Therefore, consolidating your credit card debt as well as paying off high interest credit card amounts can help you achieve this goal if you persevere.
Assess Your Spending and Saving Activities
You can help the process along by taking a good look at your credit report and seeing where you can improve with regards to how you use your credit cards. Also, make an assessment of your spending habits and what you need to do in order to save more. By doing so you can avoid the services of a credit restoration service and gain a good perspective as to how you can achieve what most people want in life economically – the chance to become financially independent so they can better provide for their family.
Make a decision to restore your credit. It may seem like a long and laborious process but you’ll be glad you did.
Bad Credit Loans | Part Two: Mortgage Loans for People with Bad Credit
Posted by Kate in Bad Credit Mortgages on September 8, 2009
The purchase of a home is often the largest financial transaction any of us will make. Whether you have good credit or bad credit, it makes sense that you should approach this kind of purchase ready to do a lot of research and spend some time understanding all the details to get the best home at the best price and with the best terms.
Overview
To find a mortgage loan for people with bad credit, you may need to be a bit more dedicated in your search. There are a large variety of programs out there – and that is part of the problem. There are varying degrees of bad credit. You want to get the best possible deal you can qualify for – not just any bad credit mortgage. You may even discover that you don’t need a bad credit mortgage. You want to go into the process prepared. That way you can ask the right questions, find the right loan product and hopefully get an interest rate you can live with.
Types of Loans
With the recent crackdown on subprime mortgages, it will take a little more digging to find a good loan product. It will be important to research as much as you can on the types of bad credit mortgages.
- ARM Bad Credit Mortgages – Most of the mortgage loans for people with bad credit are adjustable rate mortgages. These can be helpful to get into a loan at a lower payment in the first few years. However you must be careful to know before you sign your paperwork how much the mortgage can adjust. You don’t want your payment to double after the first few years of your loan. Look for 2/28 and 3/27 loans when researching this type of loan.
- Longer term fixed mortgages – There are some programs that offer a fixed rate loan but at a longer term like 40 or 50 years. These loans have the added security of knowing that your payment will not increase. However, because the term is longer you will end up paying well over an extra $100,000 over the life of the loan on an average mortgage amount.
- Low document mortgages – If you do not have a lengthy credit history or if you have other documentation issues, you may be able to find a “stated income” or “low doc” loan. These will typically have higher interest rates but can get you into a house and help you begin earning equity.
Mortgage Lenders for People with Bad Credit
Once you have a fairly good idea of the kind of loan that you think will fit your needs, it’s time to look for a lender or broker to help you find the best terms. Since your lender or broker will be your advocate, make sure you can find someone you feel comfortable working with and someone who will keep in contact with you throughout the process. Rely on referrals from friends and family or your real estate agent. You can also shop for a loan online if you feel very confident in the kind of loan you need and a good estimate of the kind of interest rates you should be getting for your credit score.
Regardless of how you find your broker, make sure you get a 2nd and 3rd opinion. Always shop around.
Preparing for the Application
Have all your documentation together ahead of time – bank statements, pay stubs, income tax returns and W2’s. Make sure to document any credit history issues so the lender can understand the reason for the late payments or other issues. Be as honest and straightforward as you can. You may also wish to provide a list of any credit references not on your credit report. For example, if you rented an apartment for a long time and always paid on time and that does not appear on the report, have your landlord write a letter of reference that you can include in your application.
Summary
Knowing your credit score and the kind of loan that will fit you the best is half the battle. When you know in advance what kind of product will work best for you, you will be able to comparison shop more easily and not be swayed by a quick pre-approval.
In the next article, we will be discussing car loans for people with bad credit.
Bad Credit Loans | Part Three: Car Loans for People with Bad Credit
For reference, the entire series of articles is listed below.
Bad Credit Loans | Part One: Loans for People with Bad Credit
Bad Credit Loans | Part Two: Mortgage Loans for People with Bad Credit
Bad Credit Loans | Part Three: Car Loans for People with Bad Credit
Bad Credit Loans| Part Four: Personal Loans for People with Bad Credit
Bad Credit Loans| Part Five: Bad Credit Refinance
