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1. Bad credit loans – Fixing your credit score

Author: Samantha Bonsu

Credit reference agencies are responsible for fixing the credit score. A bad credit score may be attributed to various reasons like:

• Delaying or missing a payment
• Debt defaults
• Financial commitments not being effectively fulfilled

Nowadays, loans are also provided to individuals having poor credit record. Initially the interest rates may seem higher, but as time passes, their credit score and financial credibility will get better if they adopt a proper financial plan with the repayment amounts being in affordable limits. But, be careful of not applying for loans which are incompatible with your financial capability.

The Internet is a good place for researching on bad credit loans. Find out about several lenders, their loan terms, processes and interest rates. Do not apply to several lenders in a short span of time as it may further damage our credit score. An independent loan broker can help you with this.

The various kinds of bad credit loans that are available these days are:

• Home loans
• Auto loans
• Credit cards
• Personal loans

Bad credit personal loans are of two types, secured and unsecured. Secured loans are provided to homeowners depending upon their debt load as well as credit score. Loan is provided on the house property. Unsecured loans are rather very risky on the lender’s part. Hence, getting them is usually difficult. Nevertheless, specialized lenders called sub-prime lenders are available for helping with unsecured loans.

For people having a damaged rating and a desire for loans with low rate, a secured loan is a good option owing to its lower risk on the lender’s part. These low rate loans can be applied once the credit rating gets better. Bad credit loans provide us with the much needed finances required to fulfill our dreams, needs, leisure and desires.

About the Author

The author is a business writer specializing in finance products and has written authoritative articles on the finance industry. She has done her masters in Business Administration and is currently assisting Loans-Bazaar as a finance specialist. For more information on Debt Consolidation Loans visit http://www.loans-bazaar.co.uk

Article Source: http://EzineArticles.com/?expert=Samantha_Bonsu

 
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2. What do lenders consider when approving bad credit mortgage loans?

Author: Liz Roberts

Lenders do not simply approve mortgage loan applications. Lenders also want to make sure that the money they will be lending will be paid back. Naturally, lenders would check on the borrower’s credit worthiness by examining their credit report.

What is a credit report and why is it so important?

Your credit report is your very record that reflects all transactions that you have between banks, lending companies and other financial institutions. Your payment history is listed in detailed within your credit report. By the law, mortgage lenders can use this document to check on an individual’s background or credit worthiness. Thus, whether you have a good credit or bad credit can affect your mortgage loan application.

How is your credit?

Obviously, if you’re planning on applying for a mortgage loan, it will be better to take a look at your credit report yourself and see if your credit rating is good enough to be approved. You may acquire a tri-merged credit report from three major credit bureaus. Based on this credit report, you will also be able to obtain your credit score.

Your credit score

Generally, your credit score will be calculated through the Fair Isaac or FICO score. If your credit score is below 620, then you have bad credit. Most likely, lenders will turn down your mortgage application.

Mortgage loans for those with bad credit

Now, if you have bad credit, does that mean you can never apply for a mortgage loan? No. In fact, there are lenders who offer bad credit mortgage loans or home equity loans for those with very low credit scores. These lenders have easier guidelines with regards to an application’s approval. However, the interest rate you’ll get on your mortgage would likely be higher than if you had excellent credit rating. This is because lenders consider individuals with lower credit ratings as high risk borrowers.

Applying for a bad credit loan

If you have decided on applying for a bad credit loan or a sub prime loan, consider various lending companies and compare their quotes before deciding on which particular lending company you will apply. Don’t forget to ensure the legitimacy of the company by checking from the Better Business Bureau.

Why not raise your credit rating?

If you can work on your credit rating before applying for a mortgage loan, then the better chances you have of getting approved and getting better rates. You can still raise your credit rating by paying the unpaid balances or settling accounts in your credit report. Also, never delay and never miss another payment with your transactions. Furthermore, make sure that there are no erroneous charges that are reflected on your credit report. If there are, request that these false charges be corrected immediately. Notify either one of the major credit reporting agencies right away. See to it that you will be given a copy of more accurate credit report afterwards.

These steps will slowly raise your credit score in time. With a higher credit score you can assure that lenders will be most willing to grant you an approval and better rates on your loan.

 About the Author

Liz Roberts is a freelance writer and loan consultant. The website BadCreditResources.com offers resources that specialize in providing bad credit loans and bad credit cards to people with bad credit.