| How you manage loans impacts your FICO score | | | | payments on time if given a second chance and they |
| more than any other factor in your credit report. It's a | | | | are willing to speak with anyone that other lenders |
| fact, you are scored heavily on the kinds of loans you | | | | have denied. |
| have, how many months or years you have had those | | | | If you go this route, you most certainly will be faced |
| loans, how much you owe, and your repayment | | | | with paying higher interest rates and may need some |
| history, are key clues that credit bureaus use to arrive | | | | sort of collateral to back the loan but, going with a loan |
| at your credit score. If you can wisely manage your | | | | from a bad credit lender is one way to ensure that |
| loans, you will add points to your credit score quickly. | | | | your low credit score will not be used to disqualify you. |
| Here are 4 key tips... | | | | Keep in mind that there is still a chance that you can |
| 1. When interest rates drop you should try to refinance | | | | try to refinance your higher interest loan in the future if |
| your high interest loans. | | | | interest rates go lower or your credit score is higher. In |
| If you have high interest rate loans, especially on big | | | | the meantime, your focus should be to consistently |
| ticket items like a motor vehicle or home mortgage | | | | improve your credit history to get your score higher so |
| and interest rates drop two points or more in the | | | | you qualify for the best interest rates and repayment |
| market, investigate refinancing some or all these loans. | | | | terms in the future. |
| This is especially true if your credit score improves to | | | | 3. Know the right answers before you talk to |
| above 700, even above 750 would be better. But, be | | | | prospective lenders. |
| wise about how you carry out this tactic. | | | | If a lender asks - "What's your credit score?" - you |
| First, shop loan sources other than the creditor that | | | | need to know exactly what you score is. |
| has your loan now. This way you may force your | | | | If a lender asks - "What's your Social Security |
| current lender to compete for your continued business | | | | number?" you need to say - "My credit score is... use |
| by offering a lower interest rate. At the same time, do | | | | that please. I would rather not have an inquiry on my |
| this only with those lenders who are obviously only | | | | credit history." |
| interested in making money on you. Stick with lenders | | | | Knowing your credit score in advance is extremely |
| with whom you have a good long-term relationship but | | | | important because it gives you an edge against |
| advise them that you are looking for a lower rate on | | | | dishonest lenders who will try to con you into much |
| your loan. | | | | higher interest rate than your score recommends. If |
| When shopping for credit give prospective creditors | | | | you give them your S.S. number without knowing your |
| only your credit score, never give your Social Security | | | | credit score in advance, they may say your credit |
| number, for them to come up with a quote. Giving your | | | | score is lower than it really is and quote you a higher |
| S.S. number results in inquiries on your credit report | | | | interest rate based on the phony score. |
| which can damage your score. When they use only | | | | The best advice is: Know your score in advance and |
| your score, no inquiries are recorded. | | | | never give your Social Security number until you are in |
| When seeking loans, you want a lower interest rate or | | | | the final stages of signing for the loan. |
| better repayment terms or both. By getting a lower | | | | 4. A little lender face-time may be called for. |
| interest rate you will save hundreds, perhaps | | | | Nothing beats face-to-face in selling and it's the same |
| thousands, of dollars in interest. At the very least, | | | | when it comes to getting a loan. Applying for loans on |
| getting more favorable monthly repayment terms that | | | | the telephone or on-line should be your last resort if |
| you can comfortably afford, will enhance your loan | | | | you have poor credit. Your first option is to go to the |
| repayment history and automatically improve your | | | | offices of your local lenders and ask to speak to a |
| score. | | | | loan officer face-to-face. This tactic can make a big |
| Refinancing is ideal for someone who is living from | | | | difference between getting the loan or being rejected. |
| pay-to-pay and having a tough time making their | | | | When you meet face-to-face, the prospective lender |
| monthly bills and who has been getting late notices or | | | | sees you as a fellow human being not just a cold |
| collections recorded in their credit history. It's also a | | | | credit score and lifeless credit history. You will have |
| good idea for someone who has been paying bills on | | | | the opportunity to sell yourself as a good credit risk. |
| time with no recent negatives in their credit history and | | | | Have a plan of action ready in advance. You can |
| who has a good credit score. They will have an easier | | | | explain that you have had some difficult times in the |
| time refinancing for a better interest rate and more | | | | past but now you are more knowledgeable about |
| favorable repayment terms. | | | | credit and would like a chance to prove yourself. |
| 2. This is not my favorite solution but, if you must, there | | | | Explain how you intend to pay back the loan and what |
| are loans available for folks with a poor credit history. | | | | you are doing with your finances overall to clean up |
| If your credit score is really poor and you need a loan, | | | | your credit. |
| you should look into services that provide loans to | | | | During this process, be confident. Be prepared. Do not |
| people with poor credit scores. But, be very careful | | | | beg. You want to appear as someone who finally has |
| you do not go even deeper into interest rate debt. | | | | their personal finances together and you just need |
| There are legitimate lenders who know that some | | | | someone to give you a chance. |
| folks with poor credit scores will still make their | | | | |