Credit rating-how you are scored

Getting approval for any type of loan depends on your credit rating. If you have average credit rating, you will find it almost impossible to get approved. It’s possible to get good rating or even improve you credit rating. Most companies almost use same rating system and if you are able to know more about it you should be able to have better credit score.

Your age is the first factor which it’s almost impossible to do anything about. Yes it’s possible to lie, but don’t because it will make things more difficult for you in future if the creditor get to know. If you are between 24 to 64 years of age you will get one point. Any age bellow or above that will score you zero point.

If you are married you have chance of adding extra point to your score. If not, you still score zero as most creditors see you as a higher risk. Also if you have no dependant you will score zero. But if you have between one to three you will add to your points. Here is how it works – if you have no dependant creditors believe you can skip town and not pay off your credit.

Creditors will also want to know more about your root. They will want to know where you live. Owning a home with a big fat mortgage or even without mortgage will give you more points. How long you stay in your present or previous residence also adds more points to your score. If you’ve move so often you will score zero point. However, if you’ve stayed up to 5 years before moving, you will surely get more point. It shows you are a good risk to them.

Other factors that will add to your point are your years on job (the longer the better), kind of job, your monthly income, present debt status, previous credit history and your saving or checking account.

You credit score is usually rate between 350 and 850. The lower your score the more difficult it will be to get loan. Scoring 800 or above should be goal of every consumer. Bellow is list of short tips on how to achieve 800 credit score or above.

Limit the number of credit card you sign up for at a time. The more card you carry the debt will have to live with. If one card is not enough for you make sure you don’t sign up for more that three cards. Also make sure that you don’t go out with more than one card in your pocket. That way you will limit your purchases when you are outside.

Make sure that you make your payment on time, if possible before the end of grace period if it’s part of the service. Late payment will affect your credit score adversely.
Whenever you want to apply for credit make sure that you don’t apply for too much credit often. Credit reporting agency may score you low as it means that you can’t live without credit.

Another thing that reporting agency consider in scoring you is outstanding balance on your credit account. If you are the type of consumer that often exceeds their limit you are risking your credit score. So make sure you don’t exceed 30-35% of your available credit. It doesn’t make sense financially to always spend all your credit at a time.

Bad Credit Doesn’t Mean Credit Is Impossible

Everyone faces unavoidable financial problems at some time and find that they are in an impossible situation and unable to meet their obligations. This situation might make some feel that it is hopeless to find money help, but that is not necessarily true.

There are two types of bad credit personal loans, secured and unsecured. A homeowner may qualify for the secured personal loan and non-homeowners may apply for the unsecured bad credit personal loan. Bad credit should not affect your ability to obtain a home mortgage loan. The interest rate for a home mortgage loan will depend upon your credit rating.If the credit score is 600 or above, the borrower is usually required to pay a 5% down payment. Credit scores that fall below 580 necessitate down payments of 20% or more. However, reputable bad credit mortgage lenders do not require unreasonable down payments of 50%.

Bad credit secured personal loans are worth considering if you own property such as real estate, automobiles, valuable jewelry, or other types of assets. However, it is important to keep in mind that the collateral may be seized and sold by the lender in the event of non-payment. In addition, there are bad credit automobile loans that are easy to apply for with minimal requirements to qualify, such as an income of $1,500 per month, proof of residency, and verifiable employment. There are reliable lenders who have reasonable interest rates and offer good financing options.

Debt consolidation loans are another option to consider if you have a history of bad debt. These loans consolidate your debts into one loan, allowing you to make one monthly payment that you can afford.Unsecured debt consolidation loans are not tied to your assets, and they eliminate annoying calls and letters from creditors, as well as helping you avoid filing bankruptcy.

Don’t let a history of bad debt keep you from having the things you want or need. There are answers to your bad debt problems.

Summary:
Educating people with bad credit so they may acquire a loan and not be at the mercy of greedy lenders.