Credit Mistakes You Should Avoid
Maintaining a good credit is very important in ensuring you are not refused credit when you need it the most. Whether it is to invest in new property or to settle debts, a good history will be of great help in getting access to the funding you need. Here are some mistakes you should avoid.
Avoid Missing Or Late Payments
Remember that your credit score will tell the lenders how likely you are to pay them back when they lend you the money you need. Always pay bills on time and whenever possible apply for automatic billing to avoid this common mistake.
Extending Credit To the Max
Never use the maximum credit card funds allocated to you. This is because lenders believe that a person who uses maximum amounts lend to them is more likely to delay their payment than those who use a portion of what they are funded with.
No Credit Mistake
You should be ready to get credit and illustrate your responsibility to future lenders rather than avoiding credit at all. Have varied types of credit and be faithful in repaying them to better your chances of getting future funding.
Four Ways to Obtain Credit with a Low Credit Score
When you want to get credit from lenders, there are several factors they consider. One of the major factors is your credit score. However, you do not have to worry because it is still possible to obtain credit with a low credit score. Here are some of the ways.
Secured Credit Card
Even if you have poor credit, you might be able to qualify for a secured credit card. This is a valuable tool that can help you to reestablish your credit and enhance your creditworthiness. To open it, you should put down a security deposit as security to help in offsetting the risk for the lender if you default your card. However, you have to note that they come with higher fees compared to unsecured credit cards.
Consider Joining a Credit Union
Even with a poor credit score, usually you can still get credit from credit unions that are owned by the members with similar interests such as work mates. The unions pass along earnings to members in form of higher customer service and lower fees.
Peer to Peer Loans
You can also get credit from a friend whereby you sign up an agreement that contain all the terms and conditions that apply. Your friend or workmate will not consider your credit score.
Ask for a Cosigner
You can also get credit if you have poor credit score, by getting a person with good credit score to sign up for credit on your behalf. This is someone who understands your situation and trusts your capability to repay the debt.
Most Popular Types of Loans for People with Poor Credit
Borrowers who have unsatisfactory credit find it a colossal task getting a loan from banks and other traditional lenders. However, there are convenient borrowing options that are still available to them, most of which requiring a collateral. Here are five types of loans for people with bad credit.
- Payday Loans
A bad credit payday loan through a professional loans service, such as http://www.nationsfinancialservicesinc.com/nofaxloans.html, can help in getting you out of an urgent financial situation without committing yourself to long term borrowing. There are certain times when you might run into an unexpected financial need, from dental work to car repair expense and anything between. Payday loans offer a convenient and easy method of getting out of a sticky financial situation. It’s an excellent choice for people who want to pay a small expense. However, the loan amount can be anywhere between $100 and $2500 depending on the lending company and it is imperative that it be paid back on the agreed date.
- Bad Credit Mortgage Loans
These loans are also known as sub-prime mortgage and targeted at people with low credit scores. Most lenders consider these people as risk and so they don’t qualify for conventional mortgage. However, the interest charged to these people is significantly higher because the lenders want to be compensated for the risk of default which they are exposing themselves to. Moreover, this kind of a loan can be structured as floating interest loan rather than a fixed interest loan.
- Secured and Unsecured Personal Loan
Banks and other lending institutions will ask loan applicants with marginal credit to provide collateral that’s equal in value to the amount which they intent to borrow. This is because they want to limit the amount of risk which they are exposing themselves to. However, there are a few lenders who loan out money to people with bad credit without asking for collateral. You can also look online for personal loans for bad credit. Loans For People With Bad Credit | Nations Financial Services is an excellent place to start!
- Auto Title Loans
While this is a form of secured loan, the borrower is not asked to surrender his or her car. However, they are required to surrender the car’s collateral which is returned to them after the loan is fully paid. Those who default on the loan repayment risk losing their motor vehicles.
- Bad Credit Car Loans
Some financiers provide bad credit loans for the purchase of new and used vehicles from dealers all over the country. If you already have an existing loan, the lenders may also be able to refinance it to a reduced interest rate. In most instances, the initial application for these loans is completed online therefore making it quick and easy. Moreover, the decision about loan approval is made very quickly. After approval, you can shop for a vehicle that suits your tastes and preferences while remaining within the limits of the loan.
When Should A Person Seek Professional Credit Advice?
Credit advice can be a huge reprieve for people who are keen on maintaining reasonable debt levels. In case you are already in deep debt, the advice can also come handy in giving you practical solutions in dealing with your current predicament. However, there are some very specific situations where credit advice would really be necessary.
If your debt is out of control, you may need the intervention of an expert to ensure the problem doesn’t escalate. In addition to this, if you are just coming out of debt problems, you will also need additional assistance in controlling your credit. The good thing is credit advice can really help you in this. Finally, if you are seeking potential financing and loan options with bad credit, you may also go for credit advice. You will be surprised that there are a lot of loan options even for people with poor credit scores.