Bad Credit Resource Center

If an active lifestyle has you having trouble making your payments timely, consider online or telephone banking.  This simple system is now available from virtually every bank and can help you pay your bills in minutes - at any time of the day or night.  If you travel a lot, online or telephone banking can be  a real life-saver as it will allow you to pay your bills no matter where you are.

Plus, you get instant confirmation of the paid bill and your payment is counted instantly.  You no longer have to worry about payments getting lost in the mail or getting lost in a bureaucratic shuffle - the record of the payment is right on your bank account statement. 

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When we go on vacation, it’s natural to want to get away from it all. When we forget to pay our bills while away, we risk getting dings on our credit that can affect our credit risk rating. Make it part of your vacation practice to pay bills in advance or to arrange someone to pay your bills while you are away. 

Similarly, while you’re ill, arrange to have bills paid so they don’t pile up and so that you don’t get marked as a “non-payer.” It’s frustrating to be trying to improve a credit score only to suffer a setback over a minor oversight.

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You’ll make life much more difficult on yourself if you deny yourself things you NEED, such as medical treatments, because your credit is poor. If you have bad credit, but need money for something urgent, consider a secured loan or a bad credit loan with generous terms.  Do not let bad credit affect your ability to stay safe and healthy.

Some people think that getting credit while trying to repair their FICO score isn’t wise.  While it’s true that you may not get the best interest rates on the loans you get, it may be too important to put off if it’s a matter of life or death.

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Credit repair is not a passive activity.  It requires continuous work and effort to maintain a good credit score and to improve a bad one.  In today’s busy life, you stand a much better chance of getting a better credit score if you make it as easy on yourself as possible.  In many cases, people actually have low credit scores not because of carelessness or indifference, but because hectic lifestyles lead to oversights and missed credit payments.  There are several things you can do to make good credit almost automatic. The next few postings will list them.

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If you apply for a loan over the telephone or online, your credit score will count heavily, because that is all the lender will likely look at before getting back to you with a quote.  If you have bad credit but still need a loan, meeting with a lender face to face is your best alternative because an actual meeting allows a lender to get an impression of you, and allows you to explain the problems you have had in the past and the things you’re doing now to make yourself a better credit risk. 

When you meet a lender in person, you force them to stop looking at you as a credit score number and make them look at you as an entire person.  This can be a huge advantage for you (especially if you are personable) and can help you get the loan your credit score does not completely qualify you for. 

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Many people assume that having an excellent credit score is justification enough for a preferred rate when applying for a loan.  It’s not! Why would they want to give you a lower rate when they can make more money with a higher one. 

Some lenders will try to tell you that your credit score is lower than it is and that disqualifies you from a better rate.  Some may rely on your ignorance (or what they think of your ignorance) about your credit score to quote you a worse rate. 

Don’t let the lender take advantage of you.  Always look up your credit score before shopping for a major loan and if you’re quoted a rate you think is unfair, speak up and tell the credit officer that your credit score of 700 (or whatever the score is) seems to indicate a better loan.

Show the lender a printed copy of your credit score.  If the lender tries to tell you that lenders get more accurate credit scores than customers who look up their own credit scores or tries to tell you that your credit score has changed, walk away and find another lender.  There are hundreds of reputable lenders out there.
 

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If your credit score is low but you need a loan, consider institutions that cater to people with poor credit scores.  These companies are more familiar with your needs and know that some creditors with poor credit scores will still make their payments on time. That’s why these companies are willing to speak with debtors other companies would reject. You may have to deal with higher interest rates, but choosing a bad credit lender can help ensure that your credit score won’t disqualify you for a loan. 

Later on once your credit score improves, you can always refinance your loan to take advantage of a better rate.

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Loans probably affect your credit score more than any other item on your credit report.  The types of loans you have, how long you’ve had loans, the amounts you owe and your payment history on your loans are big factors that impact your credit score. You can boost your credit score if you can control your loans.  The next few posts will give you a few tips that can get you well on your way to painlessly managing your loans:

Refinance loans - If you have a high interest rate loan, especially a major loan such as a car or home loan, or if your credit rating has improved since you got your loan, you may want to consider a refinance.  Refinancing means that you take your loan to another lender in order to receive better terms or rates.

However, you don’t want to do this too often. Frequent refinancing prevents you from developing long-term relationships with lenders and results in inquiries on your credit report. In the short run, refinancing can have a negative effect your credit score. This is the result of mulitple inquiries on your credit report as you look for a new lender and as you close old accounts and open new accounts. 

In the long run, though, refinancing can be a good way of boosting your credit score as you free up funds to pay for other bills.  If you’re now missing or delaying payments because you can’t afford some of your monthly bills, then refinancing a loan or two can be a good way to get back on track.

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Thanks to electronic payments, you can have your bills automatically paid out of your checking account each month or even charged to your credit card.  If you’re the kind of person who gets hurt on their credit report because you often forget to pay your bills on time, this can be a very useful service. 

You can even set up your email service to send you automatic reminders of bills that are due soon so that you can pay them.  This sort of automation is one of the nicer things about high-tech living and can help you keep your credit score clean if your credit score suffers from your forgetfulness or disorganization.

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As you may know, credit repair is not taking one big step but rather a series of small steps. To make sure that you don’t over look any one thing, you may want to develop a to do list that you can review and check off.

You may list credit accounts you need to close, accounts you need to pay down, people you need to contact, and things you need to check out or research.  As you mark off each item, you’ll get a real sense of accomplishment knowing that you’re taking steps to improve your finances.  Maintaining a credit repair checklist will also keep you on track and let you know what you still need to do.
 

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