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I've been sharing a little bit with my awesome readers about how we're in the process of purchasing our first home and how we FINALLY were able to get to this point. We had to take out a few credit cards that are geared towards those who have bad credit and are trying to rebuild.
Check out my post What I Learned From My Own Budgeting Mistakes to read more about my credit repair process!
Getting at least one of these bad credit loans can help you out, as long as you stay on top of them and don't let them go over their limit and you're paying them every month like clockwork.
The point of Bad Credit Loan cards is to help you repair your credit, not hurt it.
So use them wisely!
Years ago, there was a credit card company that offered (I say that loosely) an awesome interest rate of 79.9%. Yes, I know, that's like 3 times the amount right now for “most” beginner credit cards and store credit cards.
While we were in the beginning process of starting to fix our credit, we had to build credit at the same time. While you already know that you need to fix your credit in order to buy a home, you can't just stop using credit, nor can you cancel all of your credit cards either. You need to have a nice Credit Utilization Ratio. You can check your credit utilization ratio at Credit Sesame.
The ideal Credit Utilization Ratio should be at or under 30%
So that means for every $300 of debt, you should have made $1000. As much as I HATE to admit it, my Credit Utilization Ratio is like 2 times that right now. My husband gets on me so much because I'm just like my mother. I have plastic, so I have to use it! I'm working on repairing my credit again. Seriously, it's not an easy task!
Having a very shaky financial condition may pose the risk of disastrous events or options– having to deal with higher interest rates, and worse –bankruptcy.
However, there is light for the financially unstable– bad credit loans.
When one has a bad credit line, it might seem that his or her purchasing power is doomed. However, the financial industry gave birth to various types of financial assistance that come to the rescue when one's financial future is in a downward spiral.
But first things first, what can actually cause a bad credit, you might ask?
Bankruptcy is known as the main cause of bad credit. Common bankruptcy is one of those kinds of deals that are considered as last resort. When one is plagued with heaps of debt dilemmas, bankruptcy can be considered. What is the catch? Bankruptcy lasts for seven years on one's credit record. This prompts lenders to deny you a loan. Not paying one's debts on time on a regular basis is also one of the considered culprits of a bad credit score. This is because it tells lenders that you cannot be trusted to pay your debts on time. Moreover, those are the makings of a bad credit score.
So, what can one make out of a bad credit score? Go for a bad credit loans
This type of loan is one favorable option for those who are having a hard time to qualify for a regular loan. There are various forms of bad credit loans, these include:
- bad credit personal loans
- bad credit mortgage loans
- bad credit car loans
- bad credit debt consolidation loans
- bad credit fast cash loans
- bad credit home loans
Of course, the purpose for acquiring a bad credit loan will help in determining which kind of bad credit loan to choose.
After deciding on what kind of bad credit loan to get, here are some tips that will help one get the best deal:
Do not be impulsive.
Like any other transactions, jumping on the first bad credit loan advertisement is never advisable. The promise of reduced interest rates and low APR is not reliable. One should keep in mind that these types of loans are furnished at rates that are higher than other kinds of loans.
Do your homework.
Researching on which companies offer lower interest rates will make you land a better deal since higher rates for bad credit loans are inevitable.
Honesty is still the best policy.
Being straightforward regarding your current financial situation and your past financial misdemeanors will make creditors or other financial experts know what can really save you from your financial dilemma. Better interest rates may be offered if your real status is disclosed. Be aware of your borrowing rights, too. This way, you will be less gullible.
Do not get addicted to bad credit loans.
The rule of the thumb is that anything in excess is bad. This is also true with bad credit loans. Always opting for bad credit loans will again make one plagued with unpaid debts. So, better be moderate with these types of loans.
Learn from your mistakes.
Getting a bad credit loan is not easy and can make you shell out more in the long run. However, when done properly, it can aid one to reestablish his or her bad credit line.
I'm a North-Central Ohio Lifestyle & Parenting Influencer located just south of Norwalk in a beautiful tiny rural town called New London. Married to the love of my life, raising 2 teen boys, and 2 chubby cats. I live for coffee, swear words, family & technology.