Bad Credit Loan Articles and Blog Posts

Establishing a good credit score is absolutely crucial in today's world. Maintaining a good credit score is of equal importance. Therefore, being aware of your credit score and of ways to improve it, regardless of how high or low it is, will help you both presently and in the future.
 

How to Determine Your Credit Score

 
If you know you have bad credit or if you aren't sure if you have any credit at all, individuals are permitted to one free credit report from the three main credit reporting agencies. It is the law. These reports are available online, and by using these three main credit reporting agencies, you can become aware of your score and aware of any potential identity thefts. In order to obtain your free score, access AnnualCreditReport.com.
 

What Negatively Impacts Your Credit Score

 
Not Having Any Credit Established
This fact is a Catch-22 that can be avoided if you start establishing a good credit score early in life. Having no credit is almost as bad as having bad credit because it makes establishing or rebuilding credit very difficult. If you do not have any lines of credit open, banks and lenders will be less likely to lend to you because they have little proof – aside from your bank statements – that you will be a good risk.
 
Making Low Payments or No Payments
If you have a line or two of credit established, and you do not make above the minimum payments per month, your credit score will drop and interest will accrue. There is little worse in the world of credit than paying your line off late – or not paying it at all, and not paying it has steep consequences, including but not limited to late-charges, a decreased credit score, and even jail time.
 
Having Too Many Lines of Low-Paid or Non-Paid Credit
It is bad enough having a credit card that you can barely make the minimum payments on. Now, compound that negativity by three more credit cards. The more lines of credit you have established that you are not paying off, the lower your score will be. Consider keeping your lines of credit to two or lower, not including loan repayments. This will help you establish a higher score.
 
A Lack of Variation
If your only form of credit is in the form of a credit card, you will not be able to increase your credit score as quickly or effectively as you would if you had other forms of credit established. Other forms of credit such as loan repayments are a great way of avoiding a low score.
 

How to Increase Credit If Your Current Score is Low

 
Open a Line of Credit
This tip might seem obvious, but to many, it is not. If your credit is bad or non-existent, the quickest way to repair it is by establishing credit. Open up a secured line of credit, meaning your credit line will be up to whatever you have in your bank, or open a line of credit with a co-signer. Although this way takes some time, it will slowly increase your credit.
 
Diversify Your Credit Options
If you have the ability to, apply for a small loan. That loan can be for a vehicle, which is one of the easiest loans to acquire in the current economy, or it can be for personal use. Either way, make sure the fixed interest rate is low and that you will be able to make the payments each month.
 
Make Above-Minimum Payments
When making payments, remember that each payment has interest included into the sum. In other words, making the minimum payment will not actually allow you to pay off the balance in a timely manner. Therefore, make a payment each month but increase that payment to anywhere from $10 to $100 more than the minimum.
 
Make a Purchase on Your Plastic Credit at Least Once a Month
In order to increase your line of credit, you need to use that line of credit. Therefore, make a purchase each month or a few times each cycle and pay it off by the end of the cycle.
 

How to Maintain Credit

 
The best way to maintain your credit score is by keeping a constant watch on your credit score. Be sure to check it at least once a year. Also, be sure that all of your payments are continually up to date. Never assume that just because you've made the payments, however, that everything is up to date and current. You need to call your credit companies and check your score online regularly. While you should never panic about your credit score, you should always remain proactive about it.
 
You need credit in order to make purchases such as a home or a vehicle. You also need credit to qualify for student loans or any type of loan for that matter. Your bad credit is not something that is going to repair itself overnight. You need to take charge of your credit the way you take charge of your life. Your credit score can and will continue to decrease if you are not proactive, so start today. By following the aforementioned tips, you will have a better credit score and an easier time getting through your daily routine before you know it.
 
An individual's credit score is quite possibly the most important number that can be associated with his or her financial records. It is important to keep strict records of what this number is and it is also crucial to understand what makes a credit score good or bad. Fortunately, there are many companies that provide consumers with a free credit score at least once each year. Locating these companies, and making sure they are reputable, is a task that can be daunting. The purpose of this article is to help individuals determine what a credit score is and encourage them to be able to make the smart financial decision of requesting a free credit report with ease.
 

Credit Score Basics

 
A credit score is basically the number that determines how responsible a person is in paying off the creditors who provided various loans. The FICO credit score is the standard score in the United States, with this number being the most common one that lenders look at before determining whether or not to lend out money. The numbers for this type of score can range between 300-850, with the higher number being the better score. There are three credit reporting agencies that use FICO credit scores as their baseline. Equifax, Experian, and Transunion all strive to provide the clearest picture of an individual's credit score possible. 
 

Consequences of Bad Credit

 
Having a bad credit score can affect a person's financial future in many different ways. First, it can have a detrimental effect on the interest rates paid for loans. Car loans, home loans, and student loans all come with a certain percentage of interest that the lender agrees to pay. If the borrower's credit score is poor, it is likely that lenders will charge a higher interest rate as insurance. In the case of a really low credit score, individuals might be prohibited from getting a loan in the first place. A bad score could also deter landlords from renting an apartment, townhouse, or single family home. Landlords need to be sure that they are renting to trustworthy, responsible individuals and if the credit score says that an individual doesn't pay his or her bills on time, it is unlikely they will take that risk.
 

Why it’s Important to Check Scores

 
One of the reasons that it is so important for individuals to check their credit score regularly is that it does have the potential to improve if financial habits change. Paying bills on time is the primary way to improve a credit score's number. Similarly, credit scores can go down if bills aren't paid on time. Simply missing one loan payment can have a detrimental effect on a person's overall credit picture. In addition, keeping record of an up to date credit score is one of the primary methods to discover if an individual has been the victim of identity theft. Identity theft occurs when a criminal obtains an individual's financial information and uses that to purchase items without paying for them. In severe cases, thieves can sign up for loans or credit cards under a victim's name, which would make them accountable for the thief’s purchases. Someone taking out credit cards or loans in a victim's name is a scary thought, and keeping a current credit score record will ensure that the thief isn't able to harm a person's finances for an extended period of time without his or her knowledge.
 

How to Check Credit Scores (For Free!)

 
Finally, it is important to know the avenues which allow an individual to check his or her credit score for free. Once the Fair Credit Reporting act was passed into law it required credit bureaus to provide individuals with their credit score for free at least once every twelve months. It is important for interested individuals to look for sites that provide an authentic FICO credit score as opposed to another type of score. The FICO score is the only authentic, comprehensive score that lenders look at when determining a financial picture. Fair Isaac, the originator of the FICO score provides this service as do Experian, Transunion, and Equifax. By choosing a credit reporting organization affiliated with these credit bureaus individuals can ensure the accuracy of their report. One of the websites affiliated with Experian, Transunion, and Equifax is Annualcreditreport.com. By visiting this website individuals will be walked through the simple process of applying for their yearly credit report and will receive results in a timely matter. Once an individual has obtained the score, he or she can make a financial plan to either maintain good credit or improve poor credit. If it is discovered that an individual has been the victim of identity theft, it is crucial that he or she contact one of the three credit bureaus immediately to put a fraud alert on his or her credit report.
 
In conclusion, it is essential for individuals to obtain a free credit score reporting every twelve months to ensure their financial health. Due to the fact that the Fair Credit Reporting Act mandated free reports each year, the Credit Bureau agencies must comply and provide free reports to those who are interested. Credit reports can help individuals estimate monthly payments, improve their financial health, and keep track of crimes such as identity theft. To be able to do these things for free each year seems too good to be true, but the federal government has provided a way for it to happen. Take advantage of free credit reporting today.
 
For most people, death is regarded as the end of all mortal cares and worries. Immortality is defined by having children and family who remember the deceased after they are gone. However, debts incurred in life can haunt the deceased's survivors long after the final services are conducted. Understanding the legal boundaries and what debts are and are not collectible after death can help facilitate estate planning and ensure estate assets are divided according to one's will, rather than to satisfy debts. In this article, the questions of what is and is not generally collectible after death, who is responsible for what, and what legal remedies are available to creditors and survivors will be addressed.
 

Credit Cards and Death

 
Credit card debt enjoys a dichotomous position in estate planning. Many people use credit cards to finance end-of-life expenses such as final medical bills, disposal of remains and funeral services. This only adds to any debts accrued during the life of the cardholder, leading to a high potential for collections activity after death.
 
If a cardholder opens a line of credit without their partner's knowledge and dies before the balance is satisfied, the spouse is typically under no direct obligation to pay, as this is considered an estate expense rather than a personal obligation. If an estate enters probate, credit cards are usually among the last debts to be considered. Medical and legal expenses, taxes and mortgages are given precedence. Similarly, an authorized user who does not use the card in question after the death of the primary account holder is not normally held liable for any debts incurred. For this to be the case, the card must not be used after the primary holder's death or if the authorized user knows the estate lacks sufficient liquidity to cover any expenditures made on the card. In either of these cases, there is a high probability of criminal and civil action against the user if the card is used. In community property states, this may not apply as debts incurred after the marriage are considered community property even if one spouse entered a credit card agreement without the knowledge of the other.
 
Joint cardholders may find themselves stuck with a large bill after the demise of their partner, however. This is because joint accounts are considered communal assets and the demise of either party to the account does not relieve the surviving partner of obligation to pay. This may also serve as an exception to the 
 
The best way to ensure collection activity is not engaged against the heirs to an estate at death is to cut up the credit cards and send them to the issuing companies along with a declaration of death of the account holder, as well as contacting the major credit bureaus. The companies then have the option to contact the executor of the estate to seek payment, but under the Fair Debt Collection Practices Act or FDCPA, once the companies have been given the name of the executor, they are no longer permitted by law to contact the heirs directly to seek payment. One should also check with the companies at the time of the primary account holder's death to find out if the account was insured, as credit insurance pays off the debt in the event of the holder's demise.
 

Other Assets

 
Life insurance is a key step in estate planning. Many people worry that creditors may come after their heirs' policies after their death. Because life insurance benefits are paid directly to the heirs instead of to the estate, life insurance policies are typically not considered to be legitimate avenues for collection unless one of the heirs is assigned executor status. Even then, the estate must normally go to probate and all other avenues for payment of final debts must be exhausted before any insurance monies may even be considered. Local and state laws vary on how collections activity may affect heirs and executors, making it vitally important to contact an attorney to clarify estate and debt laws in a specific jurisdiction.
 
Estate finances and hard assets such as vehicles, houses, and so on are considered legitimate leverage to repay outstanding debts. Even so, there are a number of factors that must be taken into account, including liquid assets of the estate, salable items that can be used to pay off final debts and estate-level income streams such as royalties or annuitized payments. Most estate laws hold that any and all estate-level assets must be liquidated before any further action may be considered. Additionally, only the executor is typically considered a suitable point of contact for outstanding post-death debts unless someone else created a debt fraudulently. 
 

Protection From Post-Demise Debts

 
Credit card debt is often referred to as "unsecured" debt, meaning it is not leveraged by physical assets. A mortgage is leveraged by a house and an auto loan by the vehicle, but credit cards are leveraged solely by a user's apparent creditworthiness. Because of this, credit card debt is usually far down the list when estate resources are apportioned to satisfy end-of-life debts. 
 
Knowing this, some creditors will attempt to reach out to heirs or other family members to recoup their losses, suggesting the heirs may be subject to legal action if they do not satisfy the debts. This is generally not true under FDCPA and opens the creditor up to civil and possibly criminal action. In such events, the heirs and/or family members should contact an attorney at once to find out what their rights are by jurisdiction and under FDCPA and other federal laws.
 
By notifying the credit card companies posthaste upon the demise of a cardholder, it is possible to insulate oneself against possible legal action later as an heir. The estate itself may be vulnerable, but this will largely avoid any further collection activity companies can take against heirs, leaving all life insurance awards secure.
 

Conclusion

 
A considerable amount of care should be taken to avoid any action that may cause even the appearance of liability. Not using cards one has been issued for any reason, advising credit bureaus and issuing companies of the death of a cardholder in a timely fashion, and proper estate planning can all help prevent end-of-life debts from rolling over to the next generation. Meeting with a qualified financial planner and seeking legal counsel at the beginning of estate planning can help alleviate the needless strain of debts, allowing the survivors time to deal with their loss rather than the legal entanglements and obligations of debt.
 
 
There are many steps that can be taken to improve a credit rating, and this summer is a good time for consumers to begin the process of increasing their credit scores. Some of these steps take longer than others, and in some cases the help of professionals may be needed. Not everything mentioned below needs to be done, but the more steps taken by a consumer to improve their ratings, the better chance there is of success. 
 
The basic idea of repairing bad credit:
The first thing that is needed is a basic understanding of the factors that influence an individual’s score or rating. In order to improve this score or rating, it is only necessary to reverse the process. In other words, consumers need to understand why their rating is low and how to begin to reverse the process as well as any necessary steps to be taken. 
 
Factors that create a bad credit score:
There are certain elements of a bad rating, and all of them will center around negative marks on a consumer’s report. The major factors influencing a consumer’s score are: a bankruptcy, civil judgments and liens, late payments, account that are in collections, too much money owed and too many accounts with balances.
 
Bankruptcy:
A bankruptcy can affect a rating for as long as 10 years. After this time, the bankruptcy will be dropped from the report. There is nothing that can be done to change this, and it will have a strong negative effect on anyone’s score; however, consumers can focus on other aspects of their report and increase their scores as much as possible even with the listing of a bankruptcy on their report. 
 
Liens - especially tax liens:
If money is owed and there is a lien on one or more assets, this can be a strong negative mark against an individual. The best approach to dealing with this issue is to satisfy the lien. If there is an asset that can be sold to satisfy the lien, then this may be the best course of action. Having a lien go away can help to greatly improve anyone’s ratings. 
 
Late payments:
This is a major issue that needs to be addressed in order to begin the process of repairing bad credit. It begins by making all payments for any debt on time with no exceptions. By making payments on time, a consumer will be building up a history of responsible debt payment. The reasons that payments have been delinquent in the past need to be identified so that changes can be made to assure that debt is paid on time. One problem that is easily corrected is the payment date. Sometimes the date does not correlate well with a person’s pay period, but a creditor can often change the date to better able the debtor to pay on time. People need to be aware that late payments may only be a minor factor when scoring a person’s payment history, but if there are enough accounts with late payments, this becomes a major red flag to lenders. 
 
An account is in collections:
Once a lender has reached a certain point where it is no longer worth their trouble to collect on a debt, they will write it off as a bad debts expense and turn the account over to a collection agency. Any account that is in collections will hurt a person’s rating, and the more accounts in collections, the worse score a person will have. 
 
Too much money owed:
Even if a person has no major marks on their report, having a total amount of debt that is high compared to their income can hurt their total credit score. Although each lender may have a slightly different formula for determining a consumer’s rating, what is known as income to debt ratio is very influential. The only way to address this is to start paying down debt. Because the number of assets a person has is not an issue, if individuals have anything of value that is no longer wanted or needed, this asset can be sold to pay down a portion of the debt. This will increase a consumer’s rating with any lender.
 
Ratio of balances to credit limits is too high:
This is critical. When a lender sees that a person’s accounts are almost to the maximums, there is a reluctance to approve more lending. Consumers should never push their accounts to the limits, but if it does happen, these high balances should pay them down as soon as possible. 
 
Too many accounts with balances:
Lenders do not like to see a lot of accounts that have money owed on them. The best way to handle a problem like this is to begin to pay off the smaller balances. This may not make a large difference in a person’s total debt, but with less accounts showing a balance, a lender will be happier and give higher ratings with applying for a loan. There is no reason to close the account; this works against the consumer. It is best to keep the account open, and the limit on an account with a zero balance will help to increase a consumer’s score. Another possibility is using a consolidated loan to pay off all of the balances of all or most of the open accounts. A consumer can then make a single payment to one lender. This also makes the process of paying bills on time easier with fewer lenders to remember to pay each month. 
 
Length of time accounts has been established is too short:
This is usually a minor factor, and there is nothing that can be done about it except keep making payments on time. It is too easy to have a recently opened account with a zero balance and a record of on-time payments for a couple of months. More weight is given to accounts that have existed for longer periods of time than those that are more recent. 
 
Getting professional help this summer:
There are professional credit repair services that can help remove bad marks on a consumer’s report; however, keep in mind that unless there is a mistake made, only the lender that made the negative mark can take it off. There are some good repair services that can work with certain creditors and know how to negotiate to have a negative mark removed. When negative marks are removed, score and ratings can go up substantially. 
 
Conclusion:
This summer is a perfect time for every consumer to begin the process of repairing a bad credit score. Of course, the first step in the process begins by obtaining a copy of the reports from all three major reporting agencies and looking at them to determine exactly where a consumer stands. From this point, action can be taken on the part of an individual or with the help of a professional company. 
 

Of all the many questions you may have about someone when entering into a new relationship, the first to come to mind is probably not: "How is their credit rating?" In the first flush of romance, you may have other things on your mind. Yet, knowing something about your dating partner's credit score may be more important than you realize, especially as the romance progresses.

That is because a credit score can suggest certain things about someone that can have as much to do with their attitude and personality as it does about money. For that reason, employers, banks, landlords, security personnel and others who perform background checks consider credit ratings to be valuable indicators of the type of person they are dealing with. In the same way, there are good reasons why you should consider your partner's credit scores as a useful guide in your dating life.

Irresponsible?

Surveys have indicated that nearly two thirds of couples argue over money. Therefore, if one member of a couple is fiscally irresponsible, that may prove to be a repetitive cause of friction in the relationship. Unless your partner's poor credit rating is the result of some calamity such as medical expenses or unemployment, it could be an indication that the person just doesn't care very much about paying their bills on time. And if they are irresponsible in that category, what other important areas of life do they also show the same irresponsible attitude?

Aware?

Another, more subtle indication of possible problems is when your romantic partner doesn't seem to be aware of what their credit rating is. This is a red flag, since it can indicate either an alarming indifference to credit issues, or that they may be lying in order to avoid telling you their credit status. Neither possibility is much of a positive indicator for the relationship. If you are dealing with someone who is genuinely clueless about credit, inform them of how every person is entitled to a credit report for free each year from the credit bureaus. A credit monitoring service can also keep your partner up to date and help keep them safe from identity fraud. If your partner shows no interest in either finding out about or monitoring their credit, this again should be perceived as a major red flag.

Your Problem Too?

A partner with bad credit can end up having a negative effect on your credit rating as well. As a relationship progresses, people's financial activities become increasingly entwined. If you and your partner are spending a lot of time together, then you are probably spending a lot of money together as well. That is when their credit problems can slowly be transformed into becoming your credit difficulties as well. Looking ahead, if you get married you will probably want to open joint accounts, which is when your partner's irresponsibility will have a direct impact on your scores as well. Try to convince your dating partner of the importance of having reminders or automatic payment programs in place to prevent allowing bills to become overdue. Hopefully, in time your partner will then become better at tracking and meeting their financial obligations.

Housing Blues

In recent years it has become increasingly common for property owners to ask to see the credit ratings of prospective tenants. Banks also are very interested in the credit scores of people they are considering offering a mortgage to. For obvious reasons, it is not helpful if one party in the rental or mortgage agreement has bad credit. That is because landlords and banks will assume that if your credit rating indicates you are having trouble meeting your routine bills, why will you have any less trouble when it comes to your rent or mortgage? This is especially important if your dating leads to marriage, because then landlords and banks will automatically consider both of your credit histories equally. In other words, a serious relationship with a person with bad credit that leads to marriage can really undermine your opportunities in the housing market.

Asking the Question

Knowing your partner's credit score can give you valuable insights into who they are and what the prospects are for financial harmony in the future. However, too often we are nervous and hesitant about asking someone about their credit score. Marriage counselors generally agree that a full, frank and serious discussion about each partner's financial status, including credit scores, is essential before getting married. Such a discussion is wisely designed to prevent unpleasant fiscal surprises from coming up that can derail the marriage in the future. Awkward as it can be to bring up a discussion of credit, commonsense demands that it simply has to be done. If you really don't have a close enough relationship with your partner to discuss credit, then maybe the marriage plans need to be delayed until you do.

Attitude Matters

None of the preceding is meant to suggest that you should never consider a long term relationship with a person with less than stellar credit scores. What matters more than the scores themselves is the attitude going forward. People with bad fiscal pasts can and do change their ways and successfully raise their credit ratings. Even the worst scores can be repaired by such means as getting secured credit cards or otherwise taking steps to avoid future fiscal fiascoes. Professional credit counseling can work wonders in identifying the specific steps that can be taken to repair credit. These solutions can be tailored to match the precise fiscal circumstances of your partner's finances. The question is whether or not they are willing take such measures, and if not, whether you want to make a long term commitment to such a person.

Take It Slow

Don't let concerns about possible future problems with money keep you from enjoying the dating scene. In more casual, short term relationships, the issue of bad credit need never present itself. However, if you feel you are getting serious with someone, then you may need to slow things down until you know where your potential future husband or wife stands in the field of fiscal responsibility. Remember that your own long term credit ratings and financial security could depend on it.

 
There is a symbiotic relationship between a mortgage and the credit of an individual. Most of the time, if a person is having trouble paying back a mortgage, that person will normally have a bad financial record. For the most part, people have their net worth tied up in their place of residence, and the health of that banking transaction reflects on the overall financial health of the individual.
 
The question of bad finances being enough to take someone's house is quite a complicated subject. It is political as well as economic, and it also has to do with the financial savvy of the borrower. Here we will go over a few of the most important connections between the mortgage payment and the overall financial health of the average person.
 
First of all, people who use their house as an investment are much more likely to have bad credit.
 
Unless an individual owns more than one place of residence, there is truly very little breathing room between the mortgage and the finances of a homeowner. Although the equity of a home may fluctuate depending on the whims of the market, for the most part, a house is meant to be a livable asset, not a means to further lines of financing or other financial vehicles. Most of the time, the reason that people are taking out second mortgages is to help pay off the first mortgage, not for the reasons that the commercials say: expansion of a business, furthering education, or providing for a child.
 
With the statistics against you if you tried to use your home as an investment, you should try to avoid leveraging your equity or your mortgage for cash or more lines of credit. This is the first step to connecting bad credit and a mortgage to closely. If a borrower reneges in this situation, then missed payments may certainly cause a bank to begin a foreclosure proceeding on a home.
 
The recent banking and housing prices of 2008 turned this entire notion of mortgages and bad credit on its head, however. Many people who had completely lost all of the equity in their homes and were underwater in terms of value were helped by the government in order to save the overall economy. Because most of those borrowers had actually bought more house than they could afford, the result in a true market situation would have been homelessness in that situation. However, the lender of last resort, the government, stepped in and saved many of the homes that would have otherwise been foreclosed upon.
 
This set a precedent that opened up an entirely new world in the market for mortgages. Many banks were found to have traded mortgages overseas to other banks in order to divert their risk. Banks were foreclosing on pieces of property that they no longer had the physical the two. Many of these financial institutions were called out by members of Congress, and they were actually unable to enforce their own foreclosure proceedings. This gave the borrower more leeway when it came to connecting the long-term financial score and mortgage payments.
 
Politics aside, the long-term financial score itself can only make the situation worse when it comes to paying down the mortgage. Whether it is the cause of homelessness is an amalgamation of many financial factors, all of which have to do with the initial long-term finance report, but none of which could cause homelessness on their own.
 
Let's take a look at some of the factors that can change based on a bad long-term financial report in order to see how closely homelessness and bad long-term finances are related.
 
- High interest And Insurance Payments
 
A bad long-term credit report will cause financial lenders to view a borrower as more of a risk. Higher risks meet higher interest rates on big-ticket items such as a house. Half a point on an interest rate can mean tens of thousands of dollars over the life of a mortgage, so each click of a percentage up when it comes to interest means a lot of money.
 
In the long run, it will be the inability of the borrower to pay off this larger principle that will cause homelessness. The principal is large because of the bad long-term credit report; however, the report itself did not cause homelessness.
 
Many banks will demand higher insurance payments depending on the down payment that a borrower comes in the door with. PMI insurance is a demand that many financial institutions will have for any down payment amount that is lower than 20% of the value of the home, which the bank will determine on its own.
 
– Less Leeway on Terms
 
Having a bad long-term credit report means that banking agents will not trust you as much. They will therefore stick to the rules when it comes to any late payments that you may make. Bankers always have discretion when it comes to initiating a foreclosure proceeding; it is quite in-depth. Many smaller banks actually do not want the property because it is difficult to get rid of. They would rather work with you, but if there is no trust between the banker and the borrower, they are left with virtually no choice but to stick to the agreement that is on paper. This usually means that late payments are one step closer to a foreclosure proceeding.
 
Much of the reason that payments would be late is because payments would be higher as per month based on a high interest rate. As stated before, a high interest rate comes from a bad long-term report. This links bad long-term finances and a mortgage payment yet again; however, again, the bad report itself did not cause homelessness.
 
Your Next Move
 
Knowing that your long-term finances are an extremely important aspect of how much money you will pay on a mortgage over time, you should try to come into a banking institution with the best long-term financial report that you can muster. The major financial rating agencies are known for making mistakes. Be sure that all of the black marks that are on your report are truly attributed to your financial decisions and not those of someone with a similar Social Security number.
 
Whether you are talking about a second mortgage or trying to get into the housing market, go to a banker with whom you have a previous relationship. There are many tools that bankers have at their disposal when it comes to mortgages because of the political firestorm that the 2008 crisis raised. Your relationship with your banker will determine your access to these additional financial tools.
 
Whether as a result of poor choices or devastating financial circumstances, people sometimes end up with poor credit that can follow them throughout their lives. Low credit scores affect most aspects of modern life, and students in particular may have trouble getting the financial assistance they need for school thanks to a history of bad credit. Fortunately, students have options when it comes to educational funding even if they don't have a good credit score. The following offers helpful tips on finding the funding necessary for a fresh start at school.
 
Start with the Facts
 
Before beginning the loan process, students should start with a clear picture of their credit report and score. Credit scores determine how financial institutions and loan officers will perceive a student's ability to repay a loan. Lower scores indicate a higher risk while higher scores indicate responsibility. In any case, students need to know where they stand with lenders. Even those with a particularly low credit score and a history of poor credit can rebuild their financial standing, but they need to start early and understand their scores. Experian, Equifax and TransUnion are the three credit reporting agencies. According to federal regulations, everyone may request a free copy of their credit report from each of the three agencies once per year. However, students should note that these agencies provide a report only without a credit score; credit scores are available for a charge from several legitimate entities. 
 
Address Discrepancies
 
After students receive their credit reports, they should review them for accuracy. Mistakes happen all the time, and credit reporting agencies sometimes include irrelevant information or even serious mistakes on a person's official report. Reviewing a credit report will help a student catch errors so that he or she can address any discrepancies. Credit reporting agencies allow people to submit discrepancy reports. It's important to note that each reporting agency is governed by a different organization, and reports may differ. Students who notice errors on any of the reports should call the individual agency to report the discrepancies. 
 
Consider Government Funding
 
Most private lenders will deny loans to students with bad credit because they consider these borrowers extremely high risk. Instead of choosing the private route for student loans, those with lower credit scores should seek government funding. The U.S. government offers several options for students in need regardless of credit history. The Federal Stafford Student Loan awards students a certain amount of money depending on student status to help offset the cost of tuition and fees. The amount of the Stafford loan depends on the year of school. For example, students at the first year level will be awarded less than those in their third year of school. The Stafford loan can be partially subsidized, which means the government will forgive a certain amount of money for students who show particular need. Unsubsidized loans must be repaid, but students typically have six months from their graduation to begin repaying the loan. The six-month period is interest-free.
 
Approach Private Lenders Carefully
 
For students who still want to pursue private lenders, it's important to keep in mind that many banks and private financial companies do not forgive bad credit as easily as the U.S. government does. Still, there may be other options for students who need additional funding for school. Those with bad credit will see much higher repayment terms and interest rates than those with good credit, and banks in particular may be more inclined to award a personal loan versus a student loan. Personal loans usually need to be repaid immediately and at increased terms whereas student loans typically have a built-in deferment option. Students who pursue the private lending route should keep these things in mind to make sure they receive a student loan rather than a personal one.
 
Research Alternatives
 
There are other options for students who need school funding. The government offers a Federal Parent Loan for Undergraduate Student or PLUS loan that may help deter costs, but students should be aware that repayment for this loan requires a higher interest rate and does not come with a deferment option. Other alternatives including asking for help from close friends or family members who can cosign a loan on your behalf. Cosigning is a big responsibility, and this option should only be reserved in case of real need. Finally, students should seek other options for student funding in the form of scholarships and grants as these options do not require repayment.
 
Meet with a School Adviser
 
Throughout the lending process, students should meet with their chosen school's financial loan officer to discuss all of the options. From private funding to government assistance, there may be choices available that a student won't be able to find on her own. Loan officers who work for an educational institution help students specifically, and they know all of the avenues a student can explore to find the right funding. They can also help students fill out the appropriate applications and understand the difficult terminology that accompanies most loan applications. Plus, many schools work with the federal government and other private lenders to offer loans at better interest rates or lower terms than those offered by private institutions outside of the school.
 
Borrow Judiciously
 
When students do take out loans, they need to remember to borrow only as much as they need to attend school and pay for relevant fees. It can be tempting to take out a little extra for padding purposes, but everything borrowed must be returned. A little extra adds up, and students may find that they stay in a bad financial situation due to poor borrowing techniques. Students accrue less interest by borrowing less. To pay for costs not covered by loans, students may find work on campus or as part of a work-study program. Borrowing judiciously ensures that students can manage the payments after graduation. 
 
Work on Credit in the Meantime
 
Regardless of whether students borrow from the federal government or a private institution, those with poor credit scores and bad credit should continue to work on improving their scores in the meantime. Speaking with a financial adviser, a trusted friend or a credit repair agency could help students work through financial issues to achieve success. Poor credit happens over time, and good credit builds up over time due to better financial choices and determined effort. Creating a budget, keeping spending in check and paying off debt will go a long way toward improving one's credit score. Students who begin their education with loans may end their academic careers without them thanks to proper financial planning.
 
When people think of spring, they often think about budding flowers, warmer temperatures, and possibly best of all, spring cleaning. Spring cleaning generally represents deep-cleaning a home, but there's no reason it can't also include thoroughly revamping a person's finances. Many people leave their financial situations on the back burner because they might have bad credit, they might not want to mess with invalid entries on their credit reports, or they don't have time to switch from paper billing to email billing. However, spring is the perfect time to get everything finance-related in order and organized for easy borrowing and repayment. These are several tips for spring cleaning credit this year.
 
Do an Audit on All Card Accounts
 
The first thing that should be done once spring cleaning begins is a complete credit card audit. This means taking inventory of all opened cards, making a list of each and every one of them (as well as their balances and interest rates), and assessing which ones aren't all that necessary. The idea is to get rid of any open cards that don't serve any real purpose. One or two emergency cards can make for viable safety nets, but there's normally no real reason to have several card accounts open. Cut off any unnecessary cards that don't serve any sort of purpose.
 
Aim for a Clean Report
 
Next, it's a good idea to focus on getting the report in check. It's easy to start this portion by searching the report for errors and discrepancies and noting them. For example, take note of any open accounts that still appear on the report even though they have been paid off ages ago. It's a good idea to keep in mind that collections accounts stay on reports for seven years before they drop off in most cases.
 
If there are blatant errors on the report, they need to be disputed with the credit bureau. Proof will be needed to confirm that the errors are genuine, and also to remove the discrepancies from the report. Always report errors as soon as their found in order to have the best chance at winning a dispute.
 
Cut Out Clutter by Going Paperless and Opting Out of Junk Mail
 
There's no doubt that finances can cause quite a mess of physical clutter in the home. This is especially true if a person receives paper bills for their finances. Switch all billing methods to paperless if possible, and make sure that it is the chosen method when new accounts are opened. Paperless billing is more simple in practice as it is. Viewing a finance statement is as easy as checking email with paperless billing.
 
Likewise, card offers are also notorious for creating a lot of unneeded clutter in the home. This type of junk mail can easily be taken care of by taking the time to opt out of these types of offers. Opting out is easy online, and it can be done every five years. 
 
Sharpen the Score
 
Even if a person is working with bad credit, a credit score can improve immensely with good habits and prompt action. The first course of action anyone should take is reducing their debt in any way they can. Pay off any outstanding debt, if it's within practical means. Additionally, make payments to creditors on time and avoid getting any late fees or costs. It's also a good idea to avoid allowing accounts to go into collections at all costs. A person's score improves when they prove time and time again that they can make financially sound decisions, and that they are responsible about using borrowed money (as well as paying it back).
 
Negotiate Lower Interest Rates
 
Many people often think that nabbing lower interest rates for their accounts is essentially off limits. However, it's often easier than many would assume. Getting lower interest rates is often as easy as calling up the creditor and question and asking about getting a more sound rate. There is no guarantee that the creditor will agree with lowering the rate, but this doesn't mean that all hope is lost. Simply continue to make payments on time and in full, and call back every few months to talk about lowering the interest rate. The chances are high that the creditor will approve eventually if they see that the account is in good standing.
 
Pay Off Collection Accounts
 
Lastly, it's imperative to do an audit of any open collections accounts. Make a thorough list of all accounts that are open, as well as what's owed on each. Many times, people are surprised to find that the accounts they owe money on don't carry heavy outstanding balances. Always pay off the accounts with the least amount of money owed first. This type of change might seem small, but the overall score will reflect these efforts in a positive manner by increasing. Those with bad credit will begin to notice their scores taking turns for the better if they choose to take this step.
 
If an account has been in collections for an extended period of time, it's likely that the company that owns the account will be willing to negotiate the amount for a fraction of what was originally owed. 
 
Overall, by using these tips, anyone can begin spring cleaning their finances right away. Spring is in the air, so that means that there's no better time for a person to straighten out their finances. There's no reason anyone can't enjoy beautiful weather as well as improved finances during these warmer months!
 
Bad credit can affect a lot of areas of your life. We’ve touched on various aspects of this (how it may be harder to get approved for loans, credit, rent properties, etc…) in the blogs below. But how much will it cost you over a lifetime?
 
According to John Ulzheimer, credit expert at CreditSesame.com, “It is a fact that poor credit will make your life more expensive across a variety of services.” And that only seems to be increasing in today’s day and age. Unfortunately, bad credit consumers end up having to pay a lot more than other consumers. No two people have the same credit histories, so it is hard to pinpoint exactly how much bad credit costs you. Depending on the mistakes you’ve made, where you live, and various other factors, how much you pay for bad credit will change. But it is a fact that bad credit is much more expensive. 
 
Not sure how? 
 
Check out the average mortgage. If you have a bad credit score, you will have to pay higher interest rates. The same mortgage loan can end up costing you a lot more than someone with a FICO score of 760 or above. You’ll end up spending a lot more to get the same. And if you live in an area with a high cost of living, say New York, Chicago, or Los Angeles, the numbers can be exponentially higher.
 
Still not convinced? What about your credit card? Someone with bad credit has to pay a considerably higher interest rate. This can be up to 30% interest on a subprime credit card. Compared to a lower 15% interest rate for the average consumer, debt can add up to impressive amounts for those with bad credit. At 15%, someone with $5000 in credit card interest making the minimum payment will end up paying back about $12,000. But if your credit causes the interest rate to go up to 30%, you’ll end up having to pay over $132,000. 
 
Apart from mortgages and credit cards, there are many more things that cost more because of your credit. Auto loans, insurance premiums, cable companies, and utility companies may all charge higher rates as a result of your credit. It may seem unreal, but the costs of having bad credit are exponentially higher than those of the average consumer.
 
So what can you do?
 
If you have bad credit, the important thing to do is to focus on improving your credit. You don’t have to spend your life with these expensive costs as long as you make steps to change it. With a better credit score, you will be able to get lower interest rates, and you won’t have to worry about the exponentially higher costs of life with bad credit.
 
 
You know that bad credit can stop you from receiving the best interest rates, getting approved for loans and credit cards, renting properties, and even getting approved for jobs. But do you know how much bad credit can affect your everyday life? It turns out that bad credit can even hinder your ability to get cable, Internet, or television service. 
 
A credit check is routine when applying for these major services, because cable providers want to insure that you are financially responsible. When you sign up for a service, you receive some pricey equipment, like a cable box and modem. You then have to pay for the service each month. If you are unable to pay, the company will have to try and collect. So, the cable providers want to know that you will be able to keep up with your payments. By checking your credit report, they will know whether or not you are a liability.
 
Here are some of the major companies that check your credit score prior to approving you for cable:
 
  • AT&T: A credit check is required for all AT&T products. AT&T pulls your credit score for all major credit bureaus (Experian, Equifax, and TransUnion). If you do have bad credit, you can speak to a customer representative to determine your options. In some cases, you may be able to receive service, but others may turn you away due to your credit.
  • Comcast: Only certain products or services require a credit check, and Comcast will notify customers before requesting their credit. Comcast uses Experian and Equifax to screen these customers.
  • Cox Communications: According to Cox Communication’s website, “a credit check and/or deposit may be required.” So, consumers with bad credit should be aware that they may be turned down from obtaining services.
  • Time Warner Cable: Time Warner Cable has just started requiring credit checks for all new customers. Although the inquiry is a “soft inquiry,” meaning it will not lower your credit score, it is used to determine what amount of deposit is appropriate. Time Warner uses Experian to check potential customers.
  • Verizon: A credit check is required for all new Verizon customers. Verizon looks at each of the 3 major credit bureaus, and it is a hard inquiry into their credit report. Consumers will not be turned away based on these credit checks, but the amount of the deposit is affected.
Bad credit can affect your ability to get approved and get good deals on cable, internet, and TV. Luckily, customers with bad credit will normally be able to get some sort of service. But it may be very pricey. And if you have bad credit, you probably don’t want to get started with an expensive service that may take you more into debt. As always, work on improving your credit score, and you won’t have to worry about your cable!