Posts Tagged ‘Bad Credit’

« Older Entries

Are There Mortgage Bad Credit No Down Payment Products?

February 1st, 2010
This economy has changed a lot of things about the landscape of American lending and credit. One of the items that has been dropped like a hot potato are mortgage bad credit no down payment loans, where individuals with bad credit can get 100% financing.  The main reason for this is that these products are one of the causes of the economic meltdown – or rather, the writing of these products by banks, then the banks' sale of these product broken up into loan packages called CDOs.  As jobs were lost and home fprices fell, so did the likelihood that these loans would be repaid – so banks have run as fast as possible away from offering these types of loans.
 
But what is a person with bad credit supposed to do? Everyone needs shelter. If you ave bad credit, and it's seriously bad say under 600, and you have no down payment, then realistically, you should be looking at renting at an affordable rate, and trying to save money.  Banks will just not want to work with you, and the FHA, which guarnatees 95% of the loans in the United States, suggests a credit score of 640 as the bottom score for which you can qualify for a mortgage.
 
It's especially hard to find loans because no one is sure whether home prices will stabilize or go down. So, if you buy a home today with 100% financing, and the price of the home drops, you aren't the one losing equity – the lender and the government are.  So lenders do not want to take the risk of taking back a home that isn't worth what they lent.
 
Does that mean you can't buy a house with bad credit? No. If you can get your redit score up to the 640 range, which is still considered bad credit, you can qualify for a first-time loan (if you have never had a mortgage, or haven't had one in the past 3 years). As a "first time" homebuyer, you can buy a home with 3.5% down.  There will also be closing costs and fees, but if you can meet that bare minimum standard, which is still bad credit, you can get a home for almost no money down. 
 
Be sure that if and when you do buy, you can afford it though – today, you can probably rent more house that you can buy for the same monthly payment. Make sure you do what's right fo ryou financially, and avoid continued habits – like borrowing no money down – which keep you in financial difficulties into the future!

No comments »

Posted in Credit Repair

Tags:

Debt Reduction – Taking a Closer Look at Your Debt to Income Ratio

January 4th, 2010

One of the main reasons why many Americans look to bankruptcy and other measures of debt reduction to clear their name from this debt is because statistically as a country we have a very high debt to income ratio; sometimes way over 50% per household. This ratio can prevent people from obtaining financing, establishing credit, and can also get you in a major bind with many of your own creditors. You can calculate this by taking the percentage of the debt you have versus how much income you bring home.

So how can we as whole get better with debt reduction? Having a high DTI can be a deterrent for many creditors and finance companies to want to give us any kind of chance of having credit or financing. Taking a look at your DTI involves you taking the percentage of debt versus your income.

Getting a loan approved involves having the lender calculate your debt to income ratio to show how much risk you are as a consumer. If you DTI is higher than the norm, this shows the company that you are high risk and may run into the problem of not being able to pay the creditors back in time.

Next, you will have to calculate all your debt; this includes the payments you make monthly on all outstanding balances. Do not include your utility bills, just your credit cards, car payment, mortgage, child support, personal loans, and any business loans. If you know that any of these balances will be paid off within 3 months, do not include it. Lastly, divide your monthly expenses by the monthly income and you will calculate your debt to income ratio.

Your monthly income is the first thing that needs to be determined to start this equation. Your monthly income can include child support, alimony, benefits, annuities, and your monthly wages; this will include all income that comes into the household on a monthly basis. If your income is different on a monthly basis then the lender will calculate the last six months of standard and averaged income.

The next thing to be calculated is the debt you have incurred. Debt does not include any utility bills, but it will include credit card balances, mortgage, child support, business loans, personal loans, the car payment, etc. Do not include it if it will be paid off within three months.

Finally, go ahead and divide your monthly expenses by the your monthly income. This will give you the debt to income ratio.

Example:

Monthly Income = $3500

Fixed Monthly Expenses = $1700

DTI = 58%

This debt to income ratio is very poor and shows that expenses are so high that it would be very difficult to gain any additional credit or financing.

The first step of debt reduction is always taking a look at where you currently stand, and that is through obtaining your debt to income ratio.

Looking to find the best advice on Smart Debt Repair, then visit www.smartdebtrepair.com to find the best advice on debt consolidation scams and various debt repair tips.


No comments »

Posted in Bad Credit

Tags:

Learn How A Divorce Can Shape Your Credit Score

November 13th, 2009

The data on how many marriages end in divorce are shocking. And as emotionally painful as a divorce can be all too often it also has an highly damaging consequence on your money besides.

Scores of individuals who have had great credit for years and years end up with troubles on their credit subsequent to a divorce. Divorce is one of the main things that cause delinquent credit for many persons.

Did you know that when you are married you and your spouse are often equally treated as likewise responsible for repaying loans like mortgages, car payments and credit cards? When the split-up happens the courts usually dole out responsibility to one or the other party. However, even though this is by order of the court many times the creditors will overlook it, more than ever if the loan goes delinquent.

You have to know that a credit report will not reflect a decree of divorce. If a payment is missed by the responsible spouse the creditors can and will attempt to collect from the other party. Not only that but they will report the delinquency on both spouses credit reports. If your ex-spouse is accountable but doesn’t pay, you will be held accountable.

Since you have separate households and you are no longer receiving mail or notices at the same address, you may not even be aware that there is a difficulty with the old debts until it is too late and it is already reported on your credit.

While having your credit report being affected may seem bad enough if the other partner decides to declare bankruptcy, you could be held liable for the full amount of the balance due even though the courts assigned it to your ex spouse. You may be targeted by the creditor as the lone choice accessible for them to collect the balance.

It is disappointing but at this time the credit system is awfully unfair to the parties of a divorce. Often the only way to completely finalize a divorce is to declare bankruptcy. This is very disastrous if there is one party who strives to be responsible and very much needs to keep a untainted credit record.

Going through a divorce is just one instance of why it is so important that we have the right to repair our credit. Any item on a credit report, including a bankruptcy can be disputed if you will that it is inaccurate, misleading, incomplete, untimely, ambiguous, biased, unverifiable or unclear.

Discover everything you would like to know about credit repair companies and swift steps for credit repair triumph now. You can also learn how to remove tax liens at my blog.


No comments »

Posted in Bad Credit

Tags:

Credit Repair Help: Use This Checklist To Dispute A Negative Entry

November 9th, 2009

Here is some credit repair help – a checklist to help you dispute negative entries on your credit report. Print and save a copy to track your progress.

Access a free copy of your credit report from each of the three reporting agencies at www.annualcreditreport.com. You’ll need to supply 2 years of prior addresses and verify items that may or may not appear on your report to identify yourself. From that main website you’ll be directed to each of the reporting agencies individually. Be sure and keep track of all your logins and passwords. You have 30 days to log back in for free so print out copies you can write on.

Highlight any negative entries. Creditors don’t always report everything to every agency so look for differences on each report. If they remove a negative item the are required to notify the other agencies so they can remove it as well if they have it recorded.

Write a letter explaining why each of those negative items should not be on your report. Additionally, if you have an account that’s in good standing that’s not listed, you can have them add that. You’ll need verification and it might be easier to ask your creditor to report it directly.

In listing negative items to dispute, include account names, numbers, dates, etc. Write why you’re disputing it as well. Valid reasons are that it’s an account you never had, the dates or amounts are wrong, etc. If you don’t have a better reason, you can always say you don’t recall having that account. I’m not saying to dispute items you know are true because most creditors have staff dedicated to verifying accounts and that won’t get it off just because you listed it. Plus, lying can get you in trouble.

The items you must include are your full name with middle name and suffix, current and past mailing addresses for the past two years, social security number, and date of birth.

You must also include a copy of a government issued ID AND a copy of a utility bill, insurance or bank statement. Verification that’s NOT valid: credit card statements, voided checks, lease agreements, magazine subscriptions, or post office forwarding orders. These documents only will work. Otherwise the agencies will send you a letter saying you didn’t include enough information to identify yourself.

Send your letter USPS certified mail. If you don’t, you run the risk of them “losing” your letter and you having no way to verify you sent it.

You can track the letter on the USPS website to find out when it was delivered. They are required to investigate and verify within 30 days or they have to take the items off your report and let you know.

That’s it. You can now take steps to start building better credit.

Find out how to do your own credit repair without an agency. Visit www.creditrepairsecrets.org for free help.


1 comment »

Posted in Bad Credit

Tags:

Taking Steps To Improving Credit

November 5th, 2009

Credit difficulties can happen to anybody; particularly in the current downturn of the economy many people have encountered difficulties with their credit. We all want to keep our credit excellent but sometimes things happen that are unforeseen and out of our control. Credit problems can make life difficult because it can be almost impossible to acquire credit and if you do manage to get credit you may be charged a higher interest rate or you may have to put down more collateral.

But you can take some steps to repair your credit. First off you will need to get a current credit report from each of the three credit reporting agencies. TransUnion, Equifax and Experian are the main three in the United States. You are entitled to one no cost report each year from each of them or you can pay a fee and get a combined report that comprises all three.

When you have your report, you will need to inspect it carefully for errors and inaccuracies. It has been predicted that as many as 79% of all credit reports hold mistakes and errors so it is improbable that your credit report is completely correct. You can dispute anything out of the ordinary or anything that is inaccurate.

The credit reporting agencies are not concerned with the accuracy of their information. The fact is that they make their money by selling the information, it does not matter to them if it is truthful or not. If there are discrepancies on your report you are the only one who suffers so it is your responsibility to make sure that your credit report is accurate and correct.

Back in the 1970′s the Fair Credit Reporting Act was enacted to protect consumers. This law gives you the right to dispute anything that you deem to be mistaken or inaccurate on your report. You must submit a formal written dispute to the credit companies and after they receive the dispute they have between 30 and 45 days to either prove the accuracy of their listings or delete it from your credit report.

As a consumer you in fact have an advantage when it comes to disputing credit listings. Since the credit companies are only paid to impart information it is actually a loss to them when they have to prove a dispute. Therefore if you put forth a good case, you have a really favorable chance of getting the information deleted.

It is also intelligent to start rebuilding good credit and paying down the amounts on any debts that you have. A large percentage of your credit score is attributed to how much credit you have accessible compared to how much credit you have used. The uppermost credit scores belong to the individuals who have access to credit but rarely utilize it.

Rebuilding and repairing your credit can be completed; you just need to take the steps to get started. If your job and financial situations are in order but you still have bad credit now is the time to do what is needed to repair your credit.

Discover more about how to fix bad credit and quick fixes for credit repair accomplishment now.


No comments »

Posted in Bad Credit, Credit Repair

Tags:

Credit History Repair: What If It’s Beyond Repair?

November 4th, 2009

Is there a point of no return in doing credit history repair?

The story is usually the same. People get credit cards when they’re young. They max them out. They borrow on one to pay the other. They get more cards until they can’t anymore. Finally the minimum payments overwhelm their income and they’re stuck.

Maybe you’ve been through that already. The good news is you still have options. The main credit history repair options are bankruptcy, debt settlement, debt consolidation, credit counseling or learning to manage your debt better.

The first concern many people have is how any particular option will affect your credit. The bigger issue is a overwhelming amount of debt. Massive debt ruins your credit AND your cash flow. Keeping negative marks off your credit doesn’t do much for you if you’re drowning in debt.

Bankruptcy is a best for people who don’t have many assets. That way when you have to liquidate your assets, there won’t be much there and most of it will be exempt anyway. That option hurts your credit the most but if you’re drowning in debt, that might be your best option. Consult with an attorney for that.

Debt settlement is a great option if you just want to get out of debt and don’t mind temporary bad credit. Instead of paying your monthly payments, you put all that money in a savings account and once your accounts charge off, you negotiate 20-40% settlements with the creditors. If you do this, be sure to get it in writing that the account is settled. Be sure and know the laws in your state because in some jurisdictions, creditors can garnish wages.

Debt consolidation is where you pay off all your loans with one big loan. Usually the only place to get a loan that big when you have too much debt is from your home equity. The danger is that people often spend on their paid off accounts again and end up with twice as much debt. Then their home is in jeopardy because now they have twice the payments to keep up with.

Please don’t even attempt credit counseling. If you follow the money, they’re working for the creditors. They get a cut if they set you up with a lower rate from a creditor. That’s why most of them don’t work with all creditors. You can lower your own interest rate if that’s all you need. And for that service, they’ll put a third party intervention mark on your credit which is not a good thing.

The best option is to manage your money better. Obviously if you’re already too far behind, you need to do something more than just pay down your debt. If you can pay down your debt, pay the highest rates first. Negotiate your rates down and make your creditors bid against each other for your business. Once you pay off one, apply that payment to another. Keep that up until you’re where you want to be.

While your current situation may look dismal, there are always options. Figure out what you really want to accomplish and get started.

Find out how to do your own credit repair without an agency. Visit www.creditrepairsecrets.org for free credit advice.


No comments »

Posted in Bad Credit

Tags:

Getting A Loan With Bad Credit

October 28th, 2009

There are many people that are looking for bad credit loans these days. Many people are looking out of sheer desperation. The recession has severely damaged our economy and crippled the credit scores of many people throughout the world.

You may even be dealing with credit card debt in another country, but no matter where you are, it will be a major setback. Is there any way of guaranteeing yourself a loan? Well, there are many different factors that will influence whether you receive a loan. One lender may want to give you a loan, but another lender with lower interest rates may decide that you do not qualify because you have low credit.

Why is it harder to get a loan if you have bad credit? The reason that it is harder to get a loan with bad credit is because of the higher risk associated with having a low credit score. If you have a higher credit score, it generally shows that you have been responsible with your bills, credit cards, and loan payments.

Most people that have good credit are trusted by banks for loans because they have demonstrated trustworthiness in the past. Are you the type of person who pays your bills on time? Do you currently have a good credit score? These are questions that you should be asking before you take out bad credit loans.

What if you have been turned down by loan officers for poor credit loans? Is there any place that you can go to in order to get money? The short answer is “yes.” However, you should be careful with where you decide to take out your loan from.

There are many people that start working with payday lenders and forget to look at the final interest rates of the deal. You should always make sure that you are getting a fairly low rate of interest before you finalize a deal. It is never a good idea to assume that payday loan lenders are the only place that you can obtain loans for people with bad credit.

There are always going to be other places that you will be able to find lenders. Many times people can get online loans with bad credit for better deals than payday lenders. In fact, there are always lenders that provide “no credit check” options in order to cater to a bad credit population. You should always compare rates of online lenders to bank rates and credit unions.

It is apparent that a payday loan may be advantageous in a situation where you need money very quickly, but it is generally not regarded as the best choice. You should make sure that you have compared all loan options before deciding to finally get one. You may want to even consider working with specialized lending institutions geared specifically towards individuals with bad credit.

If you are experiencing a lot of trouble getting bad credit loans, you can always get a cosigner. Similarly, you can get a “secured loan” or even decide to pay higher interest. If you cannot think of what type of loan to get, make sure that you work with a professional to assess your options.

If you want to fully understand loans for bad credit, you should take the time to read about various lenders that offer loans with poor credit. This will help you learn about how the lending process works with poor credit.


No comments »

Posted in Bad Credit Loans

Tags:

How To Fix Your Credit Score

October 27th, 2009

One of ten Americans face the problem of having terrible credit scores or credit reports. If your one of them and are searching for a program to repair your credit, and are a few good solutions for you to look into.

Your primary step towards repairing your bad credits should be to find out what has been reported about you in your credit report. Getting credit report is inexpensive and simple. You must know that you can also get free credit report of yours from the lenders who have disapproved you credit in the recent past.

Anyone in debt should first be aware that there is no perfect solution to fixing your credit; no legitimate ways if you will. Stay away from mediators that make “promises” to solve your bad credit through loopholes and such. There people are misguiding and usually put you in a worse credit position than you started in because you just used your credit card to pay them. This can get you in a heap of trouble. So, it is wise to seek professional advise from a law firm or similar to truly fix the issue.

It is quite important to get rid of all your credit cards if you want any chance of reapairing your credit. Some people honestly cannot get by without their credit card and if this is the case, keep only ONE. Keep in only for cases of emergency and NOTHING ELSE. One of the big problems with credit is that bad credit keeps you from getting those much needed credit cards in the future.

Please be honest with yourself. I cannot emphasize this enough. The biggest problem, as you can guess, is people spending money where they do not need to. Cut your expenses in any way you can. You must know that this will make your life much worse if you do not, right? If you don’t know that, you are in trouble. Try and increase your income. If you can do these two things, no matter how small at first will increase your credit to debt ratio, the biggest area lenders look.

You should always check if there are discrepancies in your reports. Credit bureaus make mistakes in about 40% of America’s reports. You’re the one that needs to check this because believe me, the bureaus have no intention of checking themselves twice. If you do find an error, you will need to submit it in writing. This sounds like a pain but it is nothing in comparison to what a pain getting a loan will be a year from now if you don’t. Bureaus will not accept email.

It is legitimate right of the borrowers to add up such details in their credit report that can improve their credit rating. This extra information can range from complete repayment of a loan to salary increase. One must make a special check over if the authentic details that can boost up credit rating are included in the credit report or not.

SBFC law group SLC Home of SBFC law group Salt Lake City


No comments »

Posted in Bad Credit

Tags:

Credit Repair Advice: DIY Vs Agencies

October 23rd, 2009

If you’ve been considering repairing credit on your own, that’s likely a good idea before you spend money with an agency or credit counseling service.  Here are some things to consider:

**************

A piece of credit repair advice: before your hire a credit repair agency consider the pros and cons.

If you opt to repair your own credit, you’ll save the monthly fee you would be paying an agency. You’ll send letters and make calls and know exactly where you are in the process at all times. Also, if you make all your own contacts, you’ll provide the personal touch to make it all more believable.

Repairing credit yourself gives you more flexibility. If you need to wait for some life event to pass, you can. If you’re ready to get it done, you can. For example, if you see a 6 year old delinquent account, it might make sense to leave it alone rather than dispute it. It will fall off anyway after 7 years of inactivity. An agency might figure that out or they might go ahead and challenge everything.

You should consider hiring an agency if you’re short on time, have the extra money and don’t want to be bothered to manage your finances. Also, if you struggle with low self esteem and couldn’t bring yourself to call your credit card company on the phone, then an agency is right for you. Chances are though that no one fits that description. Like maintaining your personal health and raising your own children, your finances are something you should attend to yourself.

If you’re not sure what to do, there is more credit repair advice online than you could ever need. The challenge is figuring it all out and putting it in order. My advice is to find a reputable book or course that puts all the pieces together for you. Learn from another person’s experience and save yourself the time.

What about using an agency?

A credit agency will do the same thing you can do. They’ll send the same letters without your personalization. They might give you additional credit repair advice on how to negotiate your rates. They might tell you to close or open different lines of credit. The is a secure feeling knowing someone is working on your behalf.

The experience many consumers have had is that credit repair agencies take your money and then simply send out a form letter for you. It’s possible the reporting agencies see the letter and reject it based on vague information. Nobody likes being spammed with generic letters.

You’d end up wondering what’s happening as the credit repair agency continues to collect a fee month after month. And while you were waiting there will have probably been other things you could have been doing to improve your credit. If only you would have known.

My recommendation is to do your own credit repair. Spend a little bit of the money you’d give an agency and get yourself a good book or course. Your financial future is up to you.

Fix bad credit! Do your own credit history repair without an agency. Visit www.creditrepairsecrets.org for free help.


No comments »

Posted in Bad Credit, Credit Repair

Tags:

What is a FICO Score

October 22nd, 2009

Your FICO score is a vital component of managing your finances. This is the number used by the credit bureaus to determine how good your credit is. The FICO scoring system can appear to be pretty complicated if you do not know how it works. On the other hand, if you know how your FICO score is calculated, you can easily find ways to keep a good score or repair a bad one. Understanding your FICO credit score is key to maintaining good credit and keeping yourself afloat.

The first part of knowing how the FICO scoring system works is to know what qualifies as a good credit score. The highest score you can receive is 850. The best range is between 720 and 850, with scores from 675 up to 719 still representing good credit. Scores below 675 may have trouble getting good terms on money borrowed, and below 620, it may be hard to get credit at all. A score of 300 is the bottom of the FICO score ladder.

A FICO score is comprised of many different parts. To determine your FICO score a bureau looks 35% at your paymnet history, meaning how many payments are delinquent or late. If a payment is past thirty days late, it is reported to a bureau and they will then lower you FICO score. Another 30% of you FICO score depends on you credit/debt ratio. Not know what this means? That’s ok too. Let’s say you have a credit card with 10,000 dollar limits. If you have used 4,000 of that, your debt-credit ratio is 40/60. This is ideal.

Another fifteen percent of your credit score is based on the length of your credit history from the time you first borrowed money to the present. Ten percent is based on the kinds of credit you use. Some kinds are weighted more heavily. The final ten percent of your FICO score is determined by how much credit you have used recently.

Some special factors that can influence your FICO credit score include money you owe due to a court judgment or tax lien. These can carry a very large credit score penalty. If you have more than a particular number of consumer finance credit accounts, you will also find that your score is impacted negatively. The number of credit checks made recently can also lower your score, although the credit bureaus do allow for a certain number of checks in a particular window of time, such as might occur when you are shopping for the best rate on a loan.

SBFC law group Home Home of SBFC law group


No comments »

Posted in Bad Credit

Tags: