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Do you have bad credit? |
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Dealing with a bad credit history can be one of the hardest hurdles to get over. People can spend years trying to sort out their bad credit status, and this can and will affect their ability to get their first mortgage. |
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| Author: Serena Gausel |
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What should I do now if I have bad credit and still need a loan?
Find out why your application may have been declined.
Your credit profile is very important in determining whether or not an application for credit is accepted or declined.
Understand your credit rating will help improve your ability to get credit
After you make application the acceptance criteria is constantly being made tighter. Some customers who have bad credit would have been accepted last year will now be declined even though their circumstances are unchanged. Others will be offered a higher rate than the 'typical' rate because they are seen as a bad credit risk. They previously would have benefited from the lowest rate.
Stability.
There are some Key factors that will score well. Length of time at the same address; Length of time with the same employer; Length of time with your current account provider –the longer the better;
The ability to repay.
The more loans; credit cards and other credit arrangements the better! The providers wish to see a history of payments being made. Someone who is 'credit averse' may suffer because there is no history for the provider to make judgement by, even though this could indicate financial prudence; to make short of it...you need to be in debt to get credit.
Your credit score.
Virtually all the loan providers rely on credit scoring as a key component of their decision whether or not to accept an application or to determine what rate to offer the loan at. To get a credit score you must have had some debt and paid off the full amount to calculate your credit score. Even if it is only a small amount and you have applied in store or at a lending institute. That becomes a viable credit score.
Indebtedness.
The level of outgoings as a proportion of income is important. Lenders need to believe the debt is manageable and that the applicant is not 'overstretched';
Homeowner or tenant.
Homeowners score a great deal higher. Tenants will undoubtedly find it harder to be accepted and particularly difficult to benefit from the headline rate;
Other factors.
Each provider will have its own way of scoring. Employed individuals will score better than contract workers or the self employed. Skilled occupations will score better than unskilled. Older individuals will score better than younger. Certain postcodes will score better than others based on the behaviour patterns of a particular locality. You might know that the risk of you defaulting on a payment is tiny but it may be you share some characteristics of some other people that have previously defaulted.
About Author
I have been involved as a project manager for sub division development and have dealt with home buyers in every financial situation. My aim is to give some valuable advice to those struggling with the financial situation
Article Source:
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