Today, people with bad credit are truly sitting ducks for unscrupulous bad credit lenders. since we’ve become so used to using credit to live beyond our means, when we get shut off by our banks, and our credit limits lowered, we literally don’t know how to pay for things. This is going to take some time to change, both in terms of our habits and also building up a savings buffer to help pay cash for items we need or want. In the mean time, many people are still looking for bad credit lenders who will lend money for cars, credit cards houses, and other consumer goods.
Just a few years ago there were many lenders advertising their bad credit mortgages, credit cards for bad credit, and even unsecured loans for bad credit personal loans. Not today. With the incredible job loss we’ve had here in the United States, and the banks pulling the rug out from under so many people and reducing credit limits or drastically hiking credit card interest rates, no one can borrow even if they wanted to. Still, there are some situations where you might need to get credit, even if your credit is bad, you will try to find a lender who works with people with damaged credit records.
Lenders who are willing to rip off their customers know exactly how desperate some borrowers are. They offer teaser rates which don’t account for other costs and up front fees; they hide terms until you sign on the dotted line, or they make promises that they really can’t follow through on when it comes time to hand over the check. So if you’re going to try to find a lender for bad credit borrowers, be sure to do your homework.
Ask friends or other people if they have a good loan company they’ve used. Be sure to ask for references. Check with your state Attorney General’s Consumer Protection office, or talk to the Better Business Bureau about the company you’re working with. find out how long the company has been in business. BE sure you take the time to read all of the fine print. Some borrowers are in states where they have three days from the date they sign the loan documents to review and rescind if they choose – if you are buying a car or home, which are big purchases, use this time to make sure you did the right thing and talk to a lawyer if you can afford it.
The main point to remember though is that bad credit borrowers are going to face less attractive terms for any loan they get. Adding these costs and fees to your loans means you are also adding to the debt burden and financial distress that has caused your bad credit in the first place. If there is any way to avoid borrowing, try to do so.
But for some people who need a car for work, or other kinds of necessities, you might think there is no other option. Not true. By doing the best you can with cash on hand, you can purchase perhaps a car that is less than perfect, but will get you around for a year, while you spend time at a second part time job, or sell things you no longer need. Think about downsizing your apartment or home if you can. Take on some cash generating work at home, like babysitting, dog walking, yard work, or other things. Take that extra cash, and put it toward a newer car next year.
Don’t fall for the hype of the latest and greatest, as you learn to live on what you earn. In the long run, it will keep you out of the clutches of unethical bad credit lenders, and in the best case you’ll begin to put away some money to build long term financial security and not just more debt.
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