What To Do When You Have Bad Credit

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by Robert Bain

Having bad personal credit isn’t something to be proud of. It is going to result in the credit you do access costing you more money. Instead of saving some you will continue to be paying off loans with your disposable income. There are many reasons why people have bad credit though. There are also those that don’t have any credit at all for a lender to base their decision upon.

Having bad credit doesn’t mean you won’t ever be able to get credit when you need it. However, it does make the process more difficult. You will have to do your homework to find lenders willing to work with you. You will also be expected to pay a higher rate of interest on the funds than someone who has a good credit history.

Don’t view bad credit as a failure and where you will always be though. You can take action to make your credit improve over the course of time. It is something to take seriously though because negative marks on your credit history don’t go away very fast. They stay on there for lenders to review for years. The more delinquent accounts you have the worse your chances of being approved become.

In order for you to get a legitimate lender to give you funds when you have bad credit, you need to convince them that you can do better. If you haven’t established any credit before show them you are responsible. If you have been paying your own rent and electricity show them those receipts. If you are working get a letter from your employer about how you show up on time as scheduled.

If you need to borrow money don’t think you have been black listed due to your credit. Talk to some lenders and let them know the situation. You may be able to show that your credit went downhill due to losing your job when the company shut down or medical problems. You can also show that you are now back to work and even provide some medical statements. All of this shows you are really trying to be responsible with your credit.

Even with such circumstances including death in the family or a divorce though you will have higher interest to pay. If it appears that your credit problems are simply due to mismanagement of your funds though you will have a hard time finding a lender to take such a risk. They don’t want to be added to your list of creditors not being paid.

In those worst case scenarios you may come upon lenders willing to give you what you want. There is a high price attached to their funds though and this can cause you to have even more financial problems. They charge high fees for processing, extremely high rates of interest, and they even charge fees if you refinance with someone else to pay it off early. They are all about making profits off of people desperate for a lending source.

Getting the credit you need when your credit is less than perfect isn’t going to be easy. You will likely have to contact several lenders. You will also pay more for the loan and that cuts into what you could be saving for something else. If the funds are for a long term loan such as a home the additional money you pay can be a ridiculous amount. Always be cautious with your personal credit so it can serve you well into the future.

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