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[P521]Poor Credit Score Loans

by Matthew Lloyd, Mat

Equifax

CallCredit

Experian

If you apply for a credit card, then your credit card company will check your record from any of these 3 agencies. It then processes the information in a risk assessment tool which either approves your application as low-risk or alternatively, it assigns your application with a poor credit score.

Reasons You Are Given a Poor Credit Score
You may have a poor credit score or a low credit rating because you have missed monthly payments or made late payments on any of the following, for example, your:

loans

credit cards

even your domestic bills

a CCJ, etc.

Check and Verify your Credit Score

Pay £2 to any of the agencies listed above and buy, check, and verify the details of your credit file. Look for errors in your address, or in your application for a credit card, or other miscellaneous information registered in your name.

How to Get a Credit Card Application Approved

If you, somehow, have managed to get a poor credit score, you can get a credit card for yourself. However you may need to –

pay a higher APR of almost 30%

as well as a higher annual fee

do without a balance transfer option

lower top credit limit of up to £2,500

take cash advances with up to 25% APR

frequently, with a higher minimum payment of 3%

As you can see, it is just not worth getting a card with such extortionate APR figures. So what are the alternatives?

Options for People with Bad Credit

You must try and improve your credit score. And the only way to do that is to make your monthly payments on time and clear 100% of the outstanding balance at any cost. Once you get a better credit history, you can negotiate a lower rate for yourself.

But how can you do so if you pay such high APR? Well, consider a secured or a prepaid credit card.

A secured credit card

Sometimes given after the company gets a security deposit. They check your details and then issue a card with:

high APR of around 30%

higher repayments of about 5%

Prepaid credit cards
Somewhat akin to debit cards, with a few similarities and differences:

they may come embossed with a credit card logo

they may be given to you without a credit check. All you require is some ID for your with your name and address

you credit the card with an amount, for example £5,000.

Then you can use the card like a regular credit card without paying any interest. Such prepaid cards help you build a good credit history because it gets you in the habit of spending within limits.

The tough economic situation in America has led to bad credit for millions of Americans. The effects of bad credit are many. Trying to get approved for a mortgage can be very difficult if not impossible. In many cases loan applications will be denied or will require a cosigner. This makes it very difficult to get a new car or to take out any type of personal loan. The good news is that in this age there are many resources you can turn to for help. The Internet provides tons of free information on credit repair. Taking the steps to rebuild your credit is not only a great decision but doesn't have to be that difficult either.

How to get started

The first step you need to take in order to begin building good credit is to order your credit reports. You can do this for free once a year by visiting www.annualcreditreport.com or by calling their toll-free number at 1-877-322-8228. The three main credit reporting bureaus Transunion, Equifax, and Experian must comply with the Fair Credit Reporting Act, or FCRA for short, and provide you with a free copy once a year.

Upon receiving your credit reports look over them carefully. Take note of any information that you feel may be inaccurate. You should investigate these items to determine if they are in fact incorrect. It's unfortunate but errors are made on credit reports frequently. Chances are if you don't find these errors no one else will, and they will lower your credit score. You need to dispute these items and have them removed from your credit report.

Take care of the past but remember to focus on the present and future

Removing inaccurate items is a great step towards increasing your credit score. But you can't spend all your time worrying about what you've done in the past. As you go through the sometimes lengthy process of disputing inaccurate items you need to focus on what you're doing now. Begin building good credit habits that you will use the rest of your life.

•If you are dealing with maxed out credit cards you need to bring them under the limit. Aim for 60 to 70% of your credit limit. This will indicate that while you still use your credit you do not rely on it. This will look good to the credit bureaus.
•If you foresee having trouble paying your bills it's in your best interest to contact your creditors. Many times they will be able to work out a temporary payment arrangement that may lower your interest or your monthly bill. This will give you some time to get your finances in order.
•Before signing any agreements be sure the check over all of the terms. The fine print can be boring and difficult to read because of how it's worded but you must understand what you're signing. If you find you cannot understand some of the conditions please review them with someone who can explain them to you. The Truth in Lending Act, or TILA, requires that all terms of the agreement must be disclosed. There is no excuse for not understanding what you're signing.
•Use your credit cards but be responsible with them. Make small purchases that you can pay for when the bill arrives. Relying on credit cards will get you into trouble and once his bills start becoming late your credit will suffer.
•35% of your credit score, which is the largest single factor, is made up by paying bills on time. By just paying by the due date on your bills you will not only increase your credit score but you will save money from late fees as well. Most creditors report monthly, making this one of the quickest things you can do to repair your credit.

The tips above will help get your credit score moving in the right direction, up. While it is definitely important to get past inaccurate items cleared you should start using the tips above today. Disputing errors on your credit report can be an ongoing process. Do not delay in building good practices from here on out. A professional repair service can handle the sometimes frustrating dispute process so that you can focus on today.

Article Source : Pg. 8

About Author

Both Matthew Lloyd & Cris Rendall are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Matthew Lloyd has sinced written about articles on various topics from Credit Cards, Check Credit Rating and Mastercard Credit Card. Matthew Lloyd writes for About Your Money. His articles provide users with useful advice on a variety of financial products, including. Matthew Lloyd's top article generates over 74000 views. to your Favourites.

Cris Rendall has sinced written about articles on various topics from Finances, Poor Credit and Credit Counseling. Visit us for all your needs, or you can view more. Cris Rendall's top article generates over 3600 views. to your Favourites.