Credit and Credit Reputation
Credit – everyone has it. It is rising fast in popularity that almost everybody you know, including yourself has credit. Credit, in layman’s term, is using someone else’s money in order for you to make ends meet, or simply to purchase properties that you want. Credit nowadays can get you either anywhere or nowhere at all. The determining factor of your power to get credits from a store, bank or credit card company is how clean your credit reputation is.
Synonymous to credit reputation is credit history. Every time you fill out a credit application, your information is forwarded to a credit bureau that keeps track of your credit accounts which includes the amount you owe, how often or how prompt you pay the amount, and other personal information. This composes your credit history, which consequently, reflects your credit worthiness, or how good or prompt you are in paying your debts.
When your credit history is being cramped with defaulted payments on previous loans, or when you are simply being a bad creditor, you are then tagged as a person with bad credit. Bad credit is known to the industry as a negative credit rating. Most lenders would try to avoid bad creditors as much as possible, and for this, you can never blame them. Who would want to lend someone with bad credit reputation? What if the debtor would never choose to pay? These are just of the things that bother lenders when it comes to dealing with people who have bad credits.
Anyone can get involved in a bad credit. Missing to pay a loan on time for various reasons like you cannot afford to at the moment will stain your credit history. Your credit report can get flagged by these missed payments thus giving you a hard time when you decide to apply for a new loan.
Bad Credit Loans
Credit score, credit reputation, credit history – they are all the same and it doesn’t really matter how you call it. What matters most is that your credit score will hound you even if you go as far as to the ends of the earth to escape it. There is just no escaping one’s credit past and being a bad creditor would bring about a continual struggle when it comes to getting yourself a loan.
It is only sensible that having a bad credit on your record would require you not to take on any more debt. More debt would increase the chances of worsening your already adverse credit history. But there are some circumstances where you need to loan more money especially when there is an urgent need for you to purchase a house or get a mortgage. And no matter what history your credit is like, you should be able to avail of any mortgage or buy a house that you wish for. Though lenders would most likely shun away from your loan applications, there are some who are willing to get you your new house through bad credit loan mortgage.
Bad Credit Loan Mortgage
Bad credit loan mortgage is made to help people, who have a troubled credit history, secure a property or refinance to pay off other debts. With the increase in the number of people getting knee-deep with debts and giving themselves bad credit history, the popularity and the market for bad credit mortgage loan has also, consequently, increased.
myFICO® is a consumer division of Fair Isaac, the pioneer of credit risk scoring for lenders. They provide informative and useful credit information that helps everybody keep their credit reputation untainted or simply to keep them informed and aware of how the credit industry works. myFICO® insists that, although credit score is a determinant of whether or not you can get loans, it is NOT the only factor.
Most lenders would try to avoid bad creditors as much as possible, but this decision does not solely depend on your credit history. Most lenders check all other information such as the amount of debt that they think you can handle with your income and your employment history. Mortgage specialists insists that if you convince lending companies that you are financially stable as of the moment, they can consider lending you a considerable amount of money.
When planning to settle on a bad credit mortgage loan, Corey Senn tells us to choose to be honest to the lending companies. Do not attempt to hide your bad credit history or tainted credit reputation. Most likely, the lenders have heard your story before. Corey Senn is a senior partner of a California-based lending company that focuses on bad credit loans of all kinds. He also adds that people should be wary of money lenders that put a conspicuously high interest rate of the loan you plan to apply for. There are also some companies that have very strict policies that you might not be very comfortable with.
Carrie Reeder, the owner of the informative site on mortgage loans http://www.abcloanguide.com, advises people with bad credit history or poor credit score to choose carefully before closing a deal with mortgage lenders. Do not jump in at the first approval recklessly. As soon as you get your loan approved, ask your lender if there is a pre-payment penalty. Find out how much it costs and, Reeder says, if the pre-payment penalty costs more than a year’s worth, it is not worth it. Also ask what the interest rates will be, and don’t settle for estimate. Try to lock down exact figures and negotiate a lower interest rate as much as possible.
Bad credit mortgage loans have considerably higher interest rates compared to their standard counterpart, and this is understandably so. To get the most out of your bad credit mortgage loan, do not focus on its high interest rates, Carrie Reeder adds. Instead, focus on how these kinds of loans can help you improve your credit reputation and rating.
Liam Griffon, who has been working in the mortgage field for several years, suggests starting a credit repair while applying for bad credit home loans at the same time. If you pursue repairing your credit history and strengthening your credit reputation with steady progression, your future loans will have more chances of getting approved in case your current loan application fails. When your loan gets denied, you will simply apply for another one in other companies that offer bad credit mortgage loans.
Before settling down on a bad credit mortgage loans, there are several crucial things that you need to remember. Ron Stone who is a mortgage specialist that focuses on helping people with bad credit reputations purchase their dream homes, has formulated helpful steps to buying a home even with an adverse credit and no hard money.
First thing to do, Stone says, is to get a copy of your credit report in the three bureaus. This can easily be done by yourself or have someone professional like a broker do it for you. Study your credit report and make sure that all the information that can be found there are accurate. If you spot any errors, have them corrected through each bureau’s website, or the broker’s credit reporting company. There may be a little charge for every change, but an accurate credit report is sure well worth it.
The next step is to start building a good credit reputation. Don’t let yourself dig a deeper hole in debts. Improving your credit as soon as possible would consequently mean that you will be able to refinance as soon as possible.
Spend a considerable time researching options in your area. Try to find sub prime mortgage loans that you are comfortable with. While shopping for a lender, Brandon Cornett, publisher of Home Buying Institute, warns people to be wary of predatory lenders that are out to take advantage of people with bad credit history. Discuss with your broker your options as well as your credit, your rental history, your employment records, how much mortgage you actually qualify for, etc.
After discussing with your broker several valuable information and things that you need to know, find a realtor that you can trust. Search the market thoroughly and carefully. Be a wise buyer and make sure you let your realtor give you home choices that fit your needs and current credit worries. Consider the mortgage balance, which should be low, and of good value.
Corey Senn, who works in providing quality private California-based bad credit mortgage loans, gives bad creditors an uplifting message – the thing to be reminded most of when dealing with bad credit mortgage loans is that there is nothing you can lose if you play your cards well. Even if you don’t qualify in your first try, at least you would learn strategies that can help you apply for another sometime later.