Tips for How to Save Money and the Road to Better Credit

There was an old saying that said if you spent a penny, you should save a penny. That is all very well and good if all you spend are pennies. How about if you spend $10,000. Can you save $10,000. The current savings rate in The United States is given at 3.60%. Very little money is being saved. It could be that most people who think of saving in terms of getting paid by a high interest rate ate being turned off by the sad interest rates offered by banks and other savings institutions. The incentive to saving money by getting a high rate of return is not currently available. However, you might make an incentive for yourself that will give you a reason to save money.

The most important tip in saving money is to set a goal for yourself and work hard to reach it. If you plan on buying a new car, you might begin a savings plan expressly for a new car. You can then plan your strategy by doing a careful research and estimate of what you will have to do to save the money you need to buy your new car. Your strategy might start with locating the car you want. The cost of the new car is what you will have to save to get. You will have to do a careful budget analysis to determine what part of your budget is allocated to discretionary spending. This the true, but long road to savings and better credit!
The discretionary spending of your budget is what is available for you to use when making a savings plan. You should save as much of your discretionary income as you can to reach your savings goal. If that means eating in instead of out. That is what you should do. If that means watching television instead of spending a fortune each night going out to the movies and a dinner. That is what you should do. You can use a psychological crutch, your goal, a new car, as your stimulus to saving.

Getting a Home Loan with Bad Credit

Even if you have missed payments or defaulted in the past, you might still be able to get a loan to help finance your home purchase. There are steps that you can take and places that you can go to improve your chances of getting a home loan despite having a lousy credit rating.

Here are four steps that can be used to secure a home loan at something other than a ruinous cost:

Collecting Documentation

You need to demonstrate two facts if you are seeking a home loan despite having less than spectacular credit. First, you need to show that you are a reliable individual who can be trusted to honor your business agreements. Second, you need to show that you have enough income relative to your existing debt obligations to take on the additional debt of the home loan. Utility bills, particularly those for long-established business agreements, are excellent documents for proving the first, while pay-stubs, income statements, and income tax returns can be used to demonstrate the second. Similarly, bank statements are a good way to demonstrate both facts, particularly if you intend on approaching the bank listed on said statements.

Finding a Co-signer

Getting a co-signer is one of the best methods that can be used to persuade lenders to take you on as a customer. Of course, the co-signer needs to be an individual with a good credit rating because having someone with bad or even no credit rating isn’t much better than having no co-signer at all. This is because the co-signer is the individual who is expected to take up the burden of the home loan if you default on your debt obligations. The lender has little reason to reconsider if the co-signer has no resources and is known to have defaulted on his or her past debt obligations.

Going to the Lender

Approaching the right lender is an important part of securing a home loan with a less than perfect credit rating. Under ideal circumstances, you should be approaching a lender with whom you have successfully done business in the past so that relationship can be used to your advantage. Generally speaking, the bigger the lender and the more resources at its disposal, the better the chances that it’ll take on a risky borrower as a customer. You should also look into lenders that specialize in lending to customers with bad credit by using comparison shopping engines dedicated to finding home loans. Although most such lenders tend to compensate for the increased risk by charging more interest, there are also those that might be sponsored by government programs designed to encourage home ownership. For example, FHA-insured loans are easier to secure and have fewer hurdles if you are living in the United States.

Saving Up

Saving money for a bigger down payment is one of the best ways to both reduce future debt burden and increase your chances of getting the loan. The less money that lenders have to lend, the less risk for lenders and the more willing they become to lend.

Conclusion

Bear in mind that getting a home loan with poor credit is simply impossible in some cases. If you have followed all of these steps and still met with constant failure, you might need to fix your credit rating before you try again in a few years. Taking the time to fix your credit rating not only helps you get loans at better prices, but also gives you the time to save up so that you can afford to borrow less when the time comes.

References:

http://www.homeloanexperts.com.au/bad-credit-home-loans/

http://homeguides.sfgate.com/mortgage-loan-poor-credit-4394.htm

Simple ways to rebuild your credit score

The economy hit many well-intentioned borrowers hard. They wanted to pay back their loans, but they may have only made enough money to pay their important utility bills and mortgage. As a result, they knowingly and regrettably hurt their credit score.

With the economy slightly improving, it may be possible to start rebuilding your credit, but where do you start? What can you do right now to quickly improve your credit? Here are some things you should start doing to help build your credit back up.

Don’t trap yourself

If you don’t make enough money to pay your bills and loans at the same time, choose to pay your bills. Having electricity, groceries and a place to live is much more important than that credit card bill. Take care of your priorities first.

You can try to contact your creditors to see if they will negotiate a payment arrangement with you. Most creditors are willing to work with their borrowers’ situation. However, make sure that any agreement made is considered paid as agreed. That is the only way to satisfy the three major credit bureaus.

Assess which debts to pay first

The easiest way to clean up your debt is to go through a list of creditors you owe. If you owed a debt to a bank or lending company that has gone out of business or merged with another business, check to see if your debt still exists. Companies that cannot verify a debt are forced to remove the account from their servers.

After assessing that, start paying any credit card debts you owe. Credit bureaus are fast to give scores to people who pay their credit cards off. You may feel like you should pay off your student loans or other installment debts, but they don’t help your credit score as much as a paid off credit card.

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If you are searching for a new job, you may want to explain your current debts and the reason for your bad credit. Most employers disqualify candidates with poor credit. You can do this by going to each of the three major credit bureaus, Equifax, Experian and TransUnion, and leaving a note about why you have experienced poor credit with them.

Leaving a statement on these sites won’t help your score and won’t help persuade lenders, but it may help your chance at landing that job.

Secured Cards

Bad credit will hurt your chances at attaining loans and credit cards, but you may apply for a secured card. These cards require collateral, usually a deposit of $300, but they will help you rebuild your credit score, especially if you use it and pay it frequently.

However, make sure the company you attain a secured card from reports to the major credit bureaus. Otherwise, it will do nothing for your score.

Conclusion

Rebuilding your credit may be tough at first. You will certainly have to convince lenders that you are in a stable financial state, which will require you to prove your income and process paperwork. Nevertheless, it is a vital step toward securing a brighter future.

Obtaining Credit Cards with Bad Credit

 

Obtaining a credit card can be difficult if you have bad credit. Many companies will not approve you because of your credit; however, you can find credit cards that will offer cards for people with a low credit score.

One option that you might try is a secured credit card. You can deposit some money into your account, and the company will give you a credit card with a slightly higher credit line. This can help you raise your credit score.You can also apply for a subprime credit card. Unfortunately, these cards can carry high interest rates and other fees, so you need to make sure you get a good deal before applying for a card.

Credit cards for people with low credit can be found if you just look. If you have bad credit and need a credit card, here are a few options that will be beneficial for you.

1. Continental Finance Matrix Discover Credit Card: This Discover card approves people of all credits. You will not be required to pay application or processing fees, and you can build your credit by paying the bill on time. Rates will vary, and you can access your account at any time of the day or night.

2. Capital One Secured MasterCard: This card is specifically for people with poor credit, and it is a good card to help you increase your credit score. The annual fee is only $29, and the APR can be as high as 22.9 percent. A security deposit is required; however, if your account is in good standing, your credit line has the ability to increase with no additional security deposit. Balance transfers are free.

3. Orchard Bank Credit Card: This card offers reasonable fees and could help you rebuild your credit. Depending on your credit, you can obtain a secured or unsecured card. They will look at your credit and approve you for a card that corresponds with your credit type. If your credit is average, the interest rate will be between 14 and 19 percent; however, if your credit is really bad, the rate might be as high as 29.9 percent.

4. Applied Bank: This bank offers secured credit cards for individuals with bad credit. You will make a deposit into your account, which acts as your collateral to make sure you make payments. The interest rate is as low as 9.9 percent, and the annual fee is $50.

5. New Millennium Bank: The interest rate for this credit card is about 19.5 percent, and the annual fee is $59. You will be charged a one time processing fee of $99.95, but you will only pay it once. Your credit limit can be up to $5000, and travel accident insurance and auto rental insurance comes with the credit card.

What To Expect When A Potential Employer Checks Your Credit

Applying for a new job can be stressful, and many people expect to have nearly every part of their professional lives examined when they begin the application process. In recent years, however, more and more people have been surprised to learn that many potential employers are checking their personal credit histories.

The reasons that companies give fro doing this are varied. Many of them claim that an employee’s personal credit history is an indication of how well they will make financial decisions for the company. Other companies believe that a potential employee’s credit score is an indication of their ethics and honesty.Nonetheless, it is important for any job applicant to know what to expect when a potential employer asks for permission to pull his or her credit history. To start, it is important to know that an employer must ask for permission. While a company is allowed to no longer consider a person for employment if he or she does not give this permission, it is necessary for a potential employee to give written permission to pull a report. It should be noted that getting a credit report will only reduce your credit score by one or two points.

After an employer pulls your credit report, it is important to know what they can and can’t use the information to do. For example, the law states that an employer is not allowed to discriminate against any potential employee because he or she has filed for bankruptcy. Furthermore, if the information in the credit report is used to deny you a job, the employer must notify you of this in writing.

In general, most employers who request credit checks are simply making sure that a potential employee does not have too much debt. This usually means that employers want to be sure that a new employee will not be tempted to steal money from the company or be hounded at work by debt collectors. The vast majority are not interested in information about late payments or even foreclosures.

Nonetheless, it is generally a good idea for anyone who is looking for work to pay very close attention to their credit score. Make sure that all bills get paid on time, and try to keep the balances on your credit cards and other revolving debt low.

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Getting a Student Loan with Bad Credit

Getting a student loan when you have bad credit can be hard, but it isn’t impossible. There are ways to get a loan even if your credit score is too low to qualify for any other type of loan.

Start by talking to the people at the financial aid at your school. Many federal loans can be obtained without any type of credit check. Unfortunately, it has become a lot more difficult to qualify for federal financial aid over the past several years. Less money is being offered, and there are a lot more students competing for it. This means that many students are not getting enough federal loans to meet all of their educational expenses. If you cannot get a federal student loan, you will have to qualify for one on the private market.

Most private student loan companies check credit score, but there are still ways to get a private student loan. Start by applying for a student loan with a lender who is willing to work with students who have bad credit. Before applying, determine the lowest amount of money that you need to take care of your educational expenses. In general, you have a much higher chance of being approved for a loan of a small amount than a big one.

It’s important to remember that banks have a lot less risk when they offer a person a student loan than they would if they offered a person any other type of loan. This is because it is next to impossible to discharge a student loan during a bankruptcy. A lender is also allowed to garnish wages and even Social Security checks in order to get the loan repaid. This allows many banks to have a lot more flexibility with student loans than they would otherwise have with other loans. For this reason, many students with bad credit discover that they can get a student loan when they don’t qualify for any other type of credit.

Do not be surprised, however, if the bank requires you to find a co-signer for your loan. This simply provides the bank with an additional guarantee that the loan will be repaid.

What are Bad Credit Loans?

In today’s world, the ability to obtain a loan is important. For consumers who have excellent credit, finding any number of lenders who are willing to work with them is an easy task. For people who have encountered financial difficulties along the way, securing a loan is not quite as simple. This is where the concept of bad credit loans comes in to play.

Defining the Bad Credit Loan
Bad credit loans are lending arrangements that are designed for people who do not have the best credit ratings. Since many lenders place a great deal of emphasis on credit ratings when considering loan applications, a lower credit score can lead to automatic rejection. A lender who is willing to extend a loan to someone who has experienced some difficulty with credit in the past may consider other criteria and determine to take a chance on the borrower. When this is the case, the loan application is approved and the borrower agrees to comply with all the terms and conditions found in the loan contract.

 

Who Would Seek a Loan with Bad Credit?

People who have encountered past credit problems due to loss of employment, an extended illness or poor money management may choose to pursue a loan as a means of rebuilding a damaged credit score. For example, a consumer who was out of work for several months may experience a reduction in his or her credit rating even after catching up all the past due debts. By choosing to work with a high risk lender, the consumer is able to secure a loan that can be utilized to retire some of the existing debt and increase the number of positive comments on the reports provided by the major credit agencies. Those positive comments will begin to balance out the older negative reports and help the overall rating to begin increasing a little each month.

Qualifications for a High Risk Loan

Like any type of lending arrangement, potential borrowers must meet the criteria put in place by the high-risk lender. While there is some variance, most lenders of bad credit loans will confirm that the lender has a reliable source of a minimum amount of monthly income. The applicant will also have to provide proof of a permanent residence. Many lenders will require that applicants be current on their other debt obligations.

There is a good chance that the lender will pull copies of at least a couple of credit reports, but the data and the current score will be taken into consideration in light of the applicant’s current financial status. This means that if the applicant has been current on his or her debts for the last several months, that will help to offset some of the older negative information found on the reports.

Are Bad Credit Loans Different From Other Loans?

There are a couple of characteristics associated with high risk loans that help to set them apart from other lending arrangements. The interest rate that applies to the loan balance is usually higher than the rates offered to applicants with excellent credit ratings. This means you will pay more in interest over the life of the loan.

Another potential difference is that the loan will likely be secured rather than unsecured. This means you will have to pledge some sort of collateral in order to be approved. For example, if you are seeking a bad credit car loan, the automobile that you purchase with the loan proceeds will be held as security until the loan is paid in full. Should you default at any time during the loan’s duration, the lender has the right to seize the vehicle and sell it to retire the loan balance.