Credit Cards For Less Than Perfect Credit

Q: I wonder how to refinance my home loan. I owe about $150,000 on the mortgage and $30,000 on the line of credit. My house is worth conservatively around $250,000. I am only looking at the first mortgage. I am about 6 years into the 30 year fixed rate mortgage at 5.375% and thinking about 20 year term. I earn $90,000 a year and credit score is above 730. My biggest concern is that I cosigned for nephew’s student loans. He owes close to $130,000 and has paid since April, $615 per month. Is this going to negatively affect my credit score and interest rate?

A: The fact that you are a cosigner has very little to do with the interest rates in ongoing mortgage and housing mess.

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Ever since plastic credit cards were first introduced in the market, many people strive to own at least one.  Even younger people and students are provided with credit cards by their parents.  If you already own a credit card or plan to apply for one, there is one thing that you must keep in mind.  It is the fact that plastic money must be used with utmost caution.

Why Handle with Care?

While using a credit card for payment is indeed convenient and quick, consumers or cardholders need to be particularly careful about how they handle this small piece of plastic.  What is the danger in paying with credit cards?

Credit cards give its holder the freedom to buy something without cash at any time.  Because payment can be made at a later time, these plastic cards come in handy when unexpected expenses arise.  However, there is also the risk of spending more than necessary because you have the power to do so without worrying about money. 

Some credit cards are also known to carry expensive interest rate charges.  For instance, let’s say that your credit card charges 15%.  At 15% rate, a $50 worth of purchase can become $57 if you add the APR.  Imagine how much more a cardholder will pay if he/she decides to carry over a balance.  If the cardholder isn’t careful, debts can double or even triple in a few months. 

Aside from the interest rates, some credit cards are accompanied by high maintenance fees such as late penalty charge, annual fee, balance transfer cost, transaction fees, foreign conversion fees, etc.  Add up these costs to your bill and it’s easy to see how a person can be easily stuck in bad debt. 

Yes, credit card holders are strongly advised to exercise caution when spending with their credit cards.  It is crucial to be able to pay your full balance for the month to avoid incurring additional interest rate charges.  Furthermore, paying on time can save you anywhere from $30 or more on late charges.

If you are a first time credit card holder, understand your duties to your credit card company.  Learn the difference between important purchases and not important ones.   If you must use your credit card, see to it that you will be able to pay off your balance on time.

For people who own two or more credit cards, it’s best to monitor each of your accounts regularly so that you can be aware of the status of your debt and repayment.  Understand the terms and conditions of each credit card as different issuers may impose different policies, particularly in matters of repayment.  Last but not the least, be the one in charge and never let those plastic cards take control over you.

The dream of buying your own home, repaying it as soon as possible and living out your retirement is one which is not as applicable as it was to your parents or to their parents, who probably lived through the Great Depression when security in property meant security for your family. However, we have lived through our own economic crisis and we still are and it is important to learn the lessons relevant to our generation and our property needs.

Repaying your home as fast as possible doesn’t always make the best financial sense. Often cash flow, capital growth and freedom from debt are more important in maintaining stability and security for your family, than owning your home outright right now. T

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There are instances when due to an emergency or financial crisis, a consumer must seek out loans from lenders despite having bad credit.  While some bad credit loans are accompanied by unreasonable rates and fees, it is possible to find a reasonable deal if you do your research well.  Check out the following advice on how to get a bad credit loan without getting ripped off.

Analyze your situation.  Before taking out a loan, seriously consider if there are alternative solutions to your problem.  If taking out a loan is indeed the most practicable option, consider carefully the amount of loan you need.  If you currently have a bad credit rating, it is strongly suggested that you keep your loan as minimal as possible.

Raise your credit score.  Is it possible to raise your credit score?  Get a free copy of your credit report from the three major credit bureaus by visiting annualcreditreport.com.  Check your report and make sure that it does not contain errors or false charges which can pull down your score. 

If you find that corrections are needed, send a formal letter to the bureau that issued your report.  You may need to wait for 30 days for the investigation to complete.  Afterwards, if your complaint is found valid, you will receive an updated copy of your report free of charge.

Compare bad credit loans.  Lenders offer varying rates and fees so it’s up to you to compare deals.  You may request for free loan quotes by visiting websites of different lending companies or by calling their customer service number.  Always remember that the rates advertised may not be the exact rate that you will be given.  It’s important to understand that your exact interest rate will be determined based upon your credit standing.

It is always worth the effort to ask a potential lender for a lower rate.  Let your lender know the circumstances that lead to your bad credit rating.  Perhaps those circumstances might be beyond your control and not because of negligence or mismanagement on your part.  Tell your lender the steps that you’ve already done to improve your personal credit standing. 

Explain to your lender that in taking out this bad credit loan, you are hoping to improve your credit even more through timely and consistent payment.  Yes, despite the fact that you have imperfect credit rating, talking to the lender can bring about good results. 

Study the terms of the loan.  Finally, you should read and understand every statement in your bad credit loan contract to make sure that you will not be subjected to hidden fees or unfair terms later on.  If there are statements in your contract that seems vague or confusing, be sure to ask for a clear explanation. 

Do you need bad credit auto financing?  If yes, this article was written with you in mind.  Consider the following tips on you can get the best car loan deal, despite having bad credit.

Know where you stand.  It’s very important to be aware of your exact credit standing before trying to deal with lenders that offer bad credit car loans.  Check your personal credit report from the three major credit bureaus or get your free copy by visiting Annualcreditreport.com- the only authorized source of free consumer credit reports.

Avoid unnecessary rejections.  If your credit score falls below 600, you need to very careful in submitting applications.  Keep in mind that each time you submit an application, an inquiry will be made in your report which can cause your score to drop even more.  Submit only one application to the lender that offers the best deal after doing your research.

Watch out for scammers!  Look out for auto loan lenders who may offer you quick approval but charge you with excessive rates and fees on account of your poor credit.  Some lenders may also require an unreasonably high down payment.  When negotiating with a potential lender, bring a copy of your credit score to show them that you are aware of your rating.

Do your own research.  Before making inquiries or calling up lending companies, read about car loans in advance.  This way, you can understand the terminologies used and their implications; find out the accepted car loan rates in the industry; and avoid car loan scams in the market.

Do comparisons.  Is it possible for you to work on improving your credit first before taking out a car loan?  If yes, then it is recommended.  However, if you really need to get a car loan at this time, it pays to do research.  Do not sign up for the first offer no matter how good the deal seems to be.  Spend time comparing rates and quotes.  Last but not the least, closely evaluate the terms of the contract.

There are basically two types of debt reaging and several important points about each to know. We will cover both in details. The first type is when the lender is reaging debt on consumer request. If you have a past due account, you can request the creditor to reset it anew. Reaging a delinquent account amounts to your creditor setting the account due date back to current. If you missed a few credit card payments and your creditor agrees to reage your account, then the missed payments are gone. Not all lenders reage past due accounts.

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