Thursday, February 18, 2021

 

What is considered a good credit score?

A credit score is considered to be acceptable if it is above 650. Although a credit score of over 700 isn't necessary to avail of loans, a credit score of more than 650 will be the determining factor in determining your interest rate and whether you will qualify for the preferred rates. A FICO of more than 700 will give you an excellent or very good credit rating. The majority of people with very good credit ratings will qualify for the lowest interest rates available, which will give you the ability to lower your monthly mortgage payment. A credit score of less than 400 is not good. If you have a credit score that is below 400, getting a mortgage may prove to be very difficult and a bank may deny your request. Keeping your score lower than 400 will result in a much higher interest rate being applied to your loan even though you may have the money to meet your mortgage payments. Scores of 400 and below are considered to be very poor and a bank or lender may be unwilling to lend you any money or may require extremely large premiums to offer you a loan.

What can I do to increase my credit score?

Obtain a copy of your credit report from the three major credit bureaus: Equifax, Experian, and TransUnion. If your score is below 620 to cater for the middle class although a score above 620 would be preferred, you will still need to review your credit report in addition to taking steps to make sure all information on your credit report is accurate. Dispute any negative information, especially recent negative information that can have a negative impact and request better ratings by corresponding with the creditor.

Is it risky to try to amend your credit score?

An amendment to your credit score is indeed risky, as you would be amendment your report directly with the company concerned and it also goes without saying that any of your attempts to amend your credit score will be revealed.

How long do negative marks stay on your credit report?

Generally 7 years. Discharged bancruptcy and foreclosures will be on your report for 10 years. Of course, if you have a substance abuse problem, the day you discharge your debt will be last on your report and you will not have negative information relating to controlled substance abuse for longer than on your report.

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If you have no credit or very poor credit, traditional lenders may not be interested in lending to you. It can be difficult to find places that are willing to take a chance on people with bad credit, but having a co-signer can alleviate this problem, at least in the point of view of the lender. As your co-signer, or co-borrower, you agree to take responsibility for making payments should the primary borrower fail to meet his or her obligations. If you have a stable job and a co-signer, getting a loan may not be as difficult as you fear. Chances are that if you have both a job and a co-signer, you will find lenders willing to take a chance on you. Since your job and the co-signer are typically your two main assets, you will be able to get much lower interest than an individual with no credit.

It is a good idea to shop around to find the best interest rate before agreeing to co-sign on a loan. You may have a bad credit score or limited credit, so some lenders offer the lowest rates for those with no credit to offset the additional risk. Some lenders are prepared to offer their loans at this rate, but unless you have a stable job and a co-signor to back you up, you may need to look elsewhere for your loan. It is also a good idea to find out from the lender that if you make your payments on time, they will also credit you with the necessary points, which could raise your rating rather quickly. If you are able to find a loan with very low interest thanks to a co-signer, you will still pay an interest rate, even if your payments are made on time. The amount of the interest will often vary according to the amount of the loan. Since you have both a job and a co-signor, you may be able to apply for a loan in the same bank. If you can get a loan at that time, your only option may be to compare rates again, and possibly even get a loan with a higher interest rate.

If you are a bad credit candidate to co-sign a loan, you may have to bring in a co-signer to improve the covenants. For example, if you are a bad credit candidate, another person may agree to co-sign the loan if you pay up front, and make some future payments along with that loan. Be aware that whatever commitments you make to co-sign this loan for someone else may cause you to have to stick with a higher payment. This is typically done by changing the payment terms or the loan's repayment period.  Be aware that this can be done if you have some money in savings.

Like many hard things in this world, the hardest financial task is to learn to live/survive with bad credit. As long as you recognize this and take some action, it will be worth the try.

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