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If you have a very short credit history (length of time you have been using your credit), that can also be a reason as to why you have a low credit score. Keep paying your bills on time and follow good overall credit management, and rest assured – with time – your score will rise! No Credit History?
If you have absolutely no credit history, your credit score will most likely be low to start with. You can get started by applying for a credit card in an attempt to establish your credit history, or if you are trying to obtain an auto loan, but haven’t had any luck getting approved because of a short credit history (or no credit history), you can ask someone you trust to help you by co-signing on a loan with you. These are just 2 of the ways you can start establishing your credit, but probably the 2 most common ways. When you are approved for your first credit account, be sure to pay your bill(s) on time, and you will be on your way to a better credit score!Low credit score is usually due to late payments, outstanding debts, unclear credit payments or a bankrupt situation in the past. Low credit score is usually the reason why some individuals can not get a loan despite the great urgency of cash. – If a low credit score is a repeated obstacle between you and your commission, then we would like to work hand in hand with you to increase your client’s credit score as quickly as possible.
First step is to get your absolutely free credit report & score, if you haven’t already. Your next step is to determine if your credit score is actually considered “low”. Sometimes it’s hard to figure out what exactly is a good or a poor credit score. The best credit ratings are 770 points and up. Freddie Mac, for example, considers anything above 770 an “A plus.” A FICO score of over 750 will get you an “excellent” rating from Lending Tree, while Fannie Mae says a 740 is excellent. CBS reports that if you have a 720 or more, you have no worries at all, since that number is in the same level category as an 800. Fair Isaac has declared that anything over 700 is “golden.” Even a person with a credit rating of 650 or better can be considered a prime borrower, as long as there are no records of late payments on their record.
Whether you’re in a financial crunch or just lack a second Ferrari, credit card offers landing in your mailbox might look like an answer to a prayer.
Don’t succumb to temptation, says Cate Williams, vice president of financial literacy for Money Management International in Chicago.
“The first thing consumers need to do is walk from their mailbox to their shredder,” says Williams. “A new credit card might give you that sparkling feeling for about 24 hours, but as a way to clean up your finances, borrowing money to pay back other money is not a solution.”
Experts’ advice can steer you away from the top 10 credit card mistakes.
1. Getting too many Bypass the shredder and you could make one of the most common credit card blunders by collecting too many credit cards.
“Ask yourself,” says Williams, “ ‘Do I need another credit card?’ Probably 95 percent of us don’t need another one to keep in the sock drawer or in the little metal box in the kitchen.”
Howard S. Dvorkin, founder and president of Consolidated Credit Counseling Services, a nonprofit debt management company in Fort Lauderdale, Fla., agrees. “The worst mistake is that people don’t know when to stop. Too many credit cards is not a good thing.”
Even if the cards have zero balances, multiple open accounts could cause a lender to question what could happen if the account holder gives in to temptation and maxes out on all that plastic.
2. Misunderstanding introductory rates But, you argue, that new card will help you manage your money better because you can transfer other balances to a no-interest account. Welcome to credit card mistake No. 2: being misled by introductory rates.
“People don’t look at what the rate’s going to be once the teaser is over,” says Daniel Wishnatsky, certified financial planner and owner of Special Kids Financial in Phoenix. “The assumption is that it’s going to be a reasonable rate. But with these particular loans, it’s not unusual for it to go up to 18 to 20 percent. They’re surprised six months later when it expires. But if they’d done their homework, they wouldn’t be.”
3. Not reading the fine print That homework is reading the offer’s fine print. Not doing so is credit card blunder No. 3.
That tiny text insert is where you’ll discover when the zero-percent or very l ow interest rate expires. It’s also how you can find out about any balance transfer fees, as well as any offer limitations. In most cases, the introductory rate applies only to balance transfer amounts or new purchases for a certain period of time, says June A. Schroeder, a CFP with Liberty Financial Group Inc. in Elm Grove, Wis., a private financial planning and advisory firm.
4. Choosing a card for the wrong reasons You might be tempted to ignore the fine print because the card has other attractions, such as a rebate or rewards program. Don’t, or you’ll make credit card mistake No. 4: choosing a card for the wrong reasons.
“Credit card granters are not a consumer’s friend. It is a business,” says Dvorkin. “They don’t know what’s right for you. Their job is to extract as much money from you as they can. Your job is to not let that happen. People need to go through and find a card that’s right for them. There’s every sort of card out there — points, cash back, donations to your college.”
5. Not rate shopping Look for the best possible interest rate. Not shopping around is credit card mistake No. 5.
It’s especially important to note the rate on unsolicited offers. If you’re struggling financially, you’re not likely to get the most favorable rates or terms. You’ll be paying higher interest rates. So comparison shop for a credit card.
6. Making minimum payments OK. You do need another card. You read the fine print, you completely understand the terms and you got a competitive rate. But even after choosing the perfect credit card, people still make mistakes, such as No. 6 on our list, making minimum-only payments.
“Credit cards are not a form of supplemental income,” says Dvorkin. “They’re for convenience, and should be paid off at the end of every month. Paying the minimum is not going to get you anywhere. It’s going to get you in trouble, that’s where it’s going to get you.”
And it’s going to get you into trouble for a long, long time. “People don’t realize how difficult it is to pay off loans at a high rate,” says Wishnatsky. “You’re going to be paying it for your next three lifetimes.”
CreditCards.com’s calculator can show how long it will take to pay off a bill if you send only the minimum each month.
7. Paying your bill late Making late payments, blunder No. 7, is better than not paying at all, but not by much. Not only will you face a late-payment charge, which could be higher than your minimum payment, your tardiness will show up on your credit report, damage your FICO score and make it harder to get better terms for future loans and accounts.
Check your account statement for the due date and make sure you send your check in plenty of time. But the date alone isn’t enough, says Liberty Financial’s Schroeder. Some companies have cutoff times. If your check arrives on the 22nd as required, but in the afternoon mail, your payment is counted as late because your account terms called for payment by 9 a.m. that day.
If you’ve set up an automatic payment via your bank, make sure the time and date are taken into account, says Schroeder. And find out your bank’s payment policy when the due date falls on a weekend or holiday.
8. Ignoring your monthly statement You can avoid late payments by checking your credit card statement. Not doing so is mistake No. 8. Checking your statement will help you pay your bill promptly, as well as allow you to make sure that the charges on it are correct. “In these days of ID theft, you need to check your bills religiously,” says Schroeder. And you need to do so as soon as the statement arrives. If you wait too long to dispute a charge, says Schroeder, “you’re essentially accepting it.”
9. Exceeding your credit limit Checking your statements also can keep you from exceeding your credit limit, mistake No. 9. “If you’re near the top of your credit limit, try really hard to pay in cash for subsequent purchases or get an increased credit line,” says Schroeder. “If you don’t, you’ll get over-the-limit charges, which are costly and look bad on your credit report.”
10. Buying things you don’t need Careful statement examination also could prevent the 10th credit card blunder, using plastic to purchase things you don’t need.”Go over your credit card bills every month and you’ll be amazed at the number of items that, upon reflection, you could have done without,” says Wishnatsky. “It’s surprising how many purchases we make that we think are needs, but are impulse buys.”
The Phoenix financial planner tells his clients who are considering a significant purchase to wait 48 hours, if at all possible. “If you still want it, wait another 48 hours,” Wishnatsky says. “Then if you have to get it, then get it.”
Also use your statements to help you create a budget. Wishnatsky realizes many people cringe at the “B” word, but he says control of your spending and your credit card usage doesn’t have to be a way to deprive yourself. Instead, it can be a way to make things happen in financially positive ways.
“Once you get control, even to a degree, it frees you from this constant money worry,” says Wishnatsky. “You might find there are things that you can actually end up having if you just have a plan, if you get your financial desires in tune with your financial resources.”
Comparing mortgage loans is one of the most important things you can do when you’re buying a home. The decisions you make will determine the size of your monthly payments, how much you pay upfront, and how much interest you’ll pay over the life of the loan.
You might find it simpler to compare loans if you ask each lender a series of questions, including:
Find out the answers to these questions no matter what type of loan you’re considering. Each can affect the overall cost of your loan. If you are considering an adjustable-rate mortgage, or ARM, you can compare loans by asking:
ARMs are inherently more risky than fixed-rate mortgages because you’re gambling on whether interest rates will go up or go down before your rate adjusts. Understanding the best- and worst-case scenarios can help you weigh the pros and cons as you compare loans. But there’s one other big question to consider before you get an ARM:
If there’s not much difference when you compare the two, the fixed-rate loan might be a safer bet. You won’t save much in the short-term, and could save a lot over the long term. Plus, you reduce your risk if interest rates shoot up and you can’t refinance before the rate adjustment. Finally, to truly compare loans, you have to ask yourself some questions:
In the end, the best loan is the one that works for your needs.
Shopping for a mortgage can be intimidating. It’s natural to feel anxious about doing something new for the first time, and getting your first mortgage is no exception.
Fortunately, there are a few simple things you can do to make sure you’re being well-prepared before you start looking for your first home loan. Here are five tips to help first-time mortgage borrowers.:
1. Lock Your Interest Rate. Interest rates on mortgages can increase or decrease from day to day or even hour to hour. Discuss the interest rate outlook with your loan officer and try to learn as much as you can about how ups and downs in interest rate quotes might affect your mortgage payment and your ability to qualify for that loan. To protect yourself from interest rate rises, ask about a rate lock, which can reserve a specific interest rate for you for a set time period. If you decide to lock your rate, make sure your lock period won’t expire before your closing date. (Read more about locking your interest rate.)
2. Consider FHA. If you’re a first-time home buyer, you might want to shop for an “FHA loan,” which is a mortgage that’s insured by the Federal Housing Administration (FHA). FHA loans offer competitive interest rates, allow smaller down payments and have easier qualification guidelines compared with other types of loans. The minimum down payment for an FHA loan is just 3.5 percent of the purchase price of the home, although FHA loans do require that you pay mortgage insurance.
3. Take the Tax Credit. If you haven’t owned a home in the past three years, you may be able to qualify for the federal First-Time Home Buyer Tax Credit, which is worth up to $8,000. The credit is refundable, which means you’ll even get a rebate of sorts from the federal government if the income tax that you owe is less than the full amount of the credit. The credit is subject to income limitations and you’ll have to act fast since it’s set to expire after Nov. 30, 2009. Some lenders may allow you to use the credit as a down payment, to pay settlement fees or other closing costs or to pay discount points to reduce the interest rate on your loan.
4. Educate Yourself. A plain-vanilla 30-year or 15-year fixed-rate mortgage is fairly easy to understand. But other types of loans can be more complicated. If you want to consider an adjustable-rate mortgage (ARM) or other less common type of loan product, do your homework and make sure you fully understand how your loan works before you sign the loan documents.
5. Shop Around. Interest rates, loan products and loan terms vary among lenders. That means all borrowers, whether novice or not, should shop around for loan offers. Ask about the benefits and risks of each loan and be sure to compare the quoted points and estimated closing costs as well as the interest rates on different loans before you decide which would best fit your personal
Deciding what type of home loan is best for your needs might be the most trying part of the home-buying process. Your decision involves seven components.
1. Loan amount
The amount that you qualify to borrow depends on your income, expenses, down payment, and current mortgage rates. Most importantly, it should be an amount that you’re comfortable borrowing.
2. Mortgage features
There are several types of home loans. Fixed rate mortgages, or FRMs, come with rates that do not change. You make equal payments for the life of the loan. Adjustable rate mortgages, or ARMs, come with rates that move up and down as financial markets change – in general, ARM rates drop when the economy dips and increase when the economy heats up.
Hybrid ARMs combine the features of both fixed and adjustable rate mortgages. They come with a rate that’s fixed for an introductory period – typically three, five, seven or ten years – and then they convert to ARMs and begin adjusting at regular intervals. Typically, the longer a mortgage term is fixed, the higher the interest rate, and the shorter the fixed period, the lower the interest rate.
Then, there are features like interest-only payments, which lower your payment in the first few years of your loan, buy-downs like the 3-2-1, which are fixed loans with rates discounted by three percent in year one, two percent in year two, and one percent in year three. Other specialized loans include energy-efficient mortgages (EEMs), rural housing loans, manufactured home financing and FHA rehabilitation loans.
3. Mortgage rate
Interest rates are the most visible part of any mortgage advertisement, but finding the best deal isn’t as simple as looking for the lowest posted rate. A loan with a lower rate but higher closing costs may end up being more expensive. When shopping for a mortgage, you’ll want to compare the upfront costs as well as the rates, using a Good Faith Estimate (GFE) and looking at the annual percentage rate, or APR.
Lenders may offer you the chance to pay discount points to lower the interest rate of your mortgage. One point is equal to one percent of the loan amount. For a $150,000 loan, each point costs $1,500. Should you pay points? That depends on how long you plan to keep your home — the longer you plan to stay, the more you may benefit by paying points. The Points Calculator can help you determine if it makes sense to pay points upfront when taking out a mortgage.
4. Monthly payment
Your monthly payment should be one that you can comfortably make, given your own unique set of circumstances. In general, lower payments involve some tradeoffs. For example, to get a lower rate, you have to pay more fees, choose a loan with a shorter fixed period, or add riskier features like interest-only payments or prepayment penalties.
Higher payments have their upside and downside as well – 15-year mortgages, for example, come with higher payments, but you can be mortgage-free in only 15 years and you’ll pay much less interest. Choosing not to buy your rate down means you keep more money in your wallet and pay lower closing costs.
Lenders use ratios and formulas to qualify you for a home loan, but there are some things that only you know and decisions that only you can make. Any of the following can increase or decrease what you can comfortably spend on a home:
The mortgage term is the number of years it takes to pay it off. Most people know about 15 and 30-year loans, but you can find mortgages with five, 10, 20, 25, 40 and even 50 year terms as well. The shorter the term, the less interest you pay and the faster you gain home equity. Longer terms lower your monthly payment and may allow you to spend more on your home.
When you apply for a mortgage, lenders quote an interest rate at a specific cost. However, mortgages are traded in financial markets like stocks and bonds are – and that means rates go up and down all the time. If an increase in mortgage rates will derail a home purchase, it probably makes sense for you to lock in your rate right away. If you’re more flexible, you might choose to “float” your rate, waiting for a better deal. Don’t want to miss a drop in mortgage rates? Many lenders offer a “float down” option, for a fee. You can then lock your loan, but if rates are lower when your loan documents are drawn, you close at the lower rate.
7. Closing costs
Closing costs include lender fees and amounts paid to others, like title insurers, escrow companies and appraisers. There are likely to be prepaid expenses as well, such as property taxes and homeowners insurance.
Mortgage lenders must issue a Good Faith Estimate disclosure within three business days once you apply for a mortgage. However, many lenders will generate a GFE when you ask them for a mortgage quote, as long as you provide enough information. Others prefer to give you a worksheet instead of a GFE. Keep in mind, however, that only a GFE obligates the lender to honor the terms disclosed. When you close on your home loan, the actual settlement charges are compared to the GFE and must not vary by more than allowed by provisions of the Real Estate Settlement Procedures Act.
Buying or refinancing a home doesn’t have to be that confusing. According to research at HUD, simply shopping around for your loan and comparing a few mortgage quotes gets you a competitive deal and saves you money. And the tools on this site make it even easier.
Your repayment is the best part. The minimum required payment will be deducted from your bank account. You get cash when you need it most and repay when you have it! Still a little short on payday? No problem! Generally online customers are automatically renewed every pay period. Just let your lender know when you are ready to pay in full, and your loan plus fees will be deducted from your bank account by the lender.
Once you have applied online, your information will be submitted to a lender that will attempt to contact you to verify your information and explain the terms to you. Once you have spoken with your lender, your cash can be in your bank account as early as the next business day!
And don’t worry… any credit type can qualify, even bankruptcy, charge-offs and bounced checks!
The cost of your cash advance loan is dependant on many factors, such as the lender and how you manage your financial obligations. Cash advance loans are designed for emergency situations when you are short of cash and need money fast! Family emergencies, unexpected car repairs, overdrafts, telephone confection and deposits are just some of the urgent cash needs that you may experience.
Your fees are less than the cost of not having the cash you need when you need it – overdraft fees, bounced check charges, taxes, even losing your job because you can’t get to work! Actual fees are determined based on the information you provide when you submit your loan request.
Your cash can often be sent to your bank account the very next business day and you don’t repay until your next paycheck.
How much you qualify for depends on a number of factors including your lender, income and employment. To see how much you can qualify for, simply complete this fast two minute online form, speak with an agent of a participating lender, and your cash is on the way, usually the next business day! And don’t worry, any credit type can qualify, even bankruptcy, charge-offs and bounced checks!
Qualifying is easy and you don’t need to worry about your credit. Most lenders qualify you if you:
Even bankruptcy, bounced checks, charge-offs and other credit hassles don’t prevent you from getting the cash advance you need!
A cash advance provides you with emergency cash when you need it most … usually between paydays! Simply complete this fast two-minute online form; there are normally no documents to fax. Just complete your request, speak to an agent of a participating lender, and your cash could be on the way, usually the next business day!
First Financial car loans has helped people with credit issues get behind the wheel of new and pre-owned cars for over a decade. Our process takes the hassle out of car buying and financing. Complete the application form and you can get approved as soon as tomorrow.
It starts with our credit application. Many other websites collect only enough information to obtain your credit report. Our application is the most comprehensive in the industry. It was designed by scores of experienced finance managers that have placed tens of thousands of loans for people with special needs. Our application takes into account variations among numerous lender score cards allowing our finance managers to evaluate your credit profile quickly and accurately.
While we can’t guarantee that every case will be approved, we do recommend meeting as many of the following requirements to insure the best possible opportunity for becoming successfully financed.
First Financial® is the nation’s leading provider of online auto loans for people with bad credit, no credit, or bankruptcy. When it comes buying a used car with bad credit, you simply can’t find a more convenient website that offers car loans online nationwide at the lowest possible auto loan rates.
It is safe and secured and will require just some basic information that is necessary to make sure that you get a damaged credit loan. The application takes just about a minute and can be found right here. After that it will take just a day or two before you will be contacted to know if you have or have not been approved for the car loan. It is a great way to get an automobile loan and to also improve your credit score for later. Applying elsewhere is just going to increase your chance of failure which will only end up hurting your credit even more. Not everyone will be approved for a loan so there is no guarantee that you will receive financing, but we help to make sure that if it is possible for you that it is going to happen for you. It is simple and what have you got to lose?
Things are going to be completely different if you are applying with a rough credit situation. Now if you are thinking that the normal path of finding financing will apply to this as well, be prepared. Instead of applying with a bank like you normally would you will instead want to apply through lenders that offer second chance auto loans.
It is one of the simplest processes that you will be able to go through and it will take just a minute to complete. Second chance financing is going to be exactly what it sounds like. It will be where you can receive an auto loan that will give you a second chance. Simple enough right? The best way that you will be able to get one of these types of loans will be to take to financial help online.
Because of the rough economical standpoint though there are a lot of people that have slipped into a poor credit score. Everyone is going through a rough time right now financially because it is a bad economy and there is not anything that can be done about it. This is not something that is uncommon and it does not mean that you did anything wrong, but it happens and it can make some situations later in life a bit more difficult. Some of the things that can become a bit stickier will be when you look to get a car loan. Auto loans for people with poor credit are not easy to come by, but they will be possible if you take the proper steps and work around your situation to get the absolute best financing that you can get.
There are many things that may have caused it but those two in particular will definitely require you to apply for different types of loans because those are special circumstances. When searching for an auto loan without the best credit you will want to make sure that you take some time and find out exactly what you need. For example do you have a rough credit situation because of a previous bankruptcy? Possibly from a previous repossession that you went though?
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