Are you haunted by your credit score? Is a bad credit loan all you qualify for? A bad credit rating will cost you. It can result in denied loans or a substantial increase in the interest rates and insurance premiums that you pay, and even affect housing, utilities and employment.
Credit ratings are used to evaluate your creditworthiness. In general, bad credit loan lenders look at the amount of debt you carry, your ability to repay it and your history. Generally, the more debt you have, the higher risk category you are assigned. If you have a history of late payments, or more serious problems such as a court judgment against you or a personal bankruptcy, a lender may consider you to have a very high risk of default and may choose not to lend you money, or only qualify you for a bad credit loan.
Many bad credit loan lenders will accept higher-risk clients — at a cost. A bad credit loan, or sub-prime loan, is designed for people with bad credit. These have higher interest rates and charge more points, and often there is a higher penalty to repay the bad credit loan early. Bad credit loan borrowers need to beware of predatory lenders who charge exorbitant rates and fees.
Avoid a bad credit loan, or get better terms on a bad credit loan, by taking the time to improve your credit rating. Under the Fair Credit Reporting Act, you can dispute information in your credit files with the three credit repositories, and the creditor is required by law to verify the disputed information. That which can’t be verified within 30 days must be removed. While credit repair can be a do-it-yourself project, it is time consuming and tedious. RMCN Credit Services specializes in credit repair, restoration and education. Once you have improved your credit scores, you may qualify for a standard loan or a bad credit loan with better terms.
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