Apr
30
The True Cost of Bad Credit
April 30, 2007 | Leave a Comment
I am often asked the question; What does bad credit cost me?”
It is a hard question to answer because of the individual’s circumstances and the fact that lenders are competing fiercely for customers.
But I will give it my best shot.
Mortgages
If you know your credit score you will be in a position to make a pretty good guess at what interest you will be charged on a mortgage. In today’s (March 2006) market, mortgage rates for those in the top or prime category, with a score above 720, will pay around 6.25%.
As your score declines your rates will increase.
For those in the second tier, with a score between 700 and 720, rates will go up to around 6.38%; for those in the third tier, with a score between 675 and 699, rates will be about 6.91%; for those in the fourth tier, with a score of 620-674, rates will be about 8%; in the fifth tier, with scores in the area of 560 to 619, the rates increase to 9%; finally for those with the lowest scores, 500 to 559, the rate jumps to 9.82%.
On a $150,000 mortgage, your payments will be between $926 and $1411, a $485 difference per month.
Additionally, those in the lowest tiers will face higher loan origination fees.
Most bankrupts will be in the 650 area - if they behave themselves - within two years of bankruptcy. You will save a lot of money if you push your score above 675 before trying for a mortgage.
These numbers are not written in stone and vary from lender to lender. According to some news accounts, you can qualify for the lowest rates with a score of 620, but proof of that is hard to find.
Auto Loans
You will not qualify for zero or low APR financing offered by manufacturers. You will have to deal with a sub prime lender and will be charged rates in the 21 to 24% area.
Again, loan origination fees may be high.
Credit Cards
Interest rates will be high up in the 30% area. If that was not bad enough, bad credit risks face fees that can choke an elephant.
Fees commonly charged to those with poor credit include the following:
Setup fee - while you can find some lenders that may not charge a setup fee, fees between $29 and $49 are not uncommon.
One time fees - these can be as much as $100
Account maintenance fees - $6 or $7 a month
Annual fees - $35 to $150
Bad credit credit card fees can easily run over $250 the first year, a little bit less after that, if you are not careful.
Other Hidden Costs
Bad credit can ruin your chances of getting a new job if you employer checks your credit report, which many do.
Some auto insurance companies will charge you higher premiums if you have bad credit.
Your utility deposit may be higher than for those with good credit.
You may not be able to rent an apartment, if the landlord doesn’t like your credit.
Even though just about anybody can find credit, no matter how bad their credit score, that doesn’t mean it will be inexpensive, or even affordable. It pays to shop around and read the terms of any offer of credit very carefully.
Rebuild your credit. Pay all your bills promptly and without fail. Only use a portion of your available credit, 20 to 25%. Avoid applying for new credit.
Within two years or so, if all goes well, you may qualify for better credit terms.
For more information on credit and the ways to find the best deals, visit http://www.credit-yourself.com/financial-services.html
Chris Cooper, a retired attorney, and his wife Aileen, who has an MBA in Finance, provide personal financial planning advice at Credit Yourself - http://www.credit-yourself.com
Tags: debt consolidation loans, credit cards
Popularity: 13%
Apr
29
Need Instant Cash? Get Bad Credit Cheap Payday Loan
April 29, 2007 | Leave a Comment
Do extra expenses disturb your monthly finances? Get your unexpected cash need met by fast and easy payday loan which offer you instant cash. Cheap payday loans offer you money even with a bad credit history.
Payday loans are short term loans that are offered in cheap rates to meet your instant expenses. This may include your urgent medical or telephone bills or any other expenses for which you cannot afford to delay.
With a payday loan you get a loan amount ranging from £200-£1500. The repayment term is around a week to a month as these are short term loans and are offered in small amounts.
You get payday loans with all types of credit score. Even a poor credit scorer can avail bad credit payday loan in cheap rates. This is mainly because payday loans are available in such a short time that no credit is check is run by the lender.
Bad credit Payday loans are called so because they are usually offered to individuals who fall short of fund to meet any expense before their next payday comes. The loans cater mostly to working people who have a fixed date of monthly salary. So, in order to get a payday loan, you need to fulfill these conditions:
- You should be a regular employee of a company
- Your minimum monthly salary should be £1000
- You should have an active salary account
- You should be a UK citizen with above 18 years of age.
Bad credit Payday loans are basically available against a post-dated check paid in advance to the lender. This check serves as a security to the lender. The check has the total repayable amount which the borrower will repay when the loan term gets over.
The reason why payday loans are preferred is just because of its speed and the main reason behind its speed is the online availability of these loans. Payday loans are mostly offered online because which are available in such a short time. While applying to payday loans, you just need to fill an online application form which will hardly take a few minutes. Once you submit the form, the lender will quickly approve the deal within 2-3 hours and dispatch the cash in the next 24-48 hours.
While applying for payday loans you should however keep in mind some points. Internet is flooded with lenders. You will find a large number of discounts and special offers which might attract your attention. But do not be carried away by them. A proper thorough research is very necessary before choosing the lender. Go through as many loan quotes as possible and choose which you think is the most suitable for you.
Payday loans are a fast and secure way to get rid of financial emergencies. So the next time you come across any urgent bill, just say payday loans.
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Tim Kelly is an expert in finance having completed her LLM in Finance (Master of Laws in Finance) from Institute for Law and Finance at Frankfurt University. To find Bad credit Payday loans, Advance bad credit payday loans, Bad credit personal payday loans, Online bad credit payday loans in UK that best site’s you need visit http://www.bad-credit-payday-loan.net |
Tags: bad credit, bad credit auto loan
Popularity: 34%
Apr
29
Bad Credit Credit Cards - Choosing the Right Credit Card
April 29, 2007 | Leave a Comment
If you have bad credit, your credit card options are limited. Aside from many credit card companies denying your application, individuals with bad credit usually receive very low credit limits and additional fees. When applying for a credit card, choosing the right card is essential. Here are a few tips to consider when selecting a credit card.
Take Advantage of Bad Credit Credit Cards
Before applying for a major credit card with a bank, carefully consider your credit rating. Credit card inquiries will decrease your credit score. Thus, avoiding too many inquiries is important. To do so, limit the number of times you apply for credit. Rather, choose one or two companies that are likely to approve your application.
For example, if your credit rating is bad, it’s realistic to assume that the odds of getting approved are slim. With this said, it helps to research bad credit credit cards. Several companies issue unsecured and secured credit cards to people with bad credit. This is a great way to improve credit rating and re-establish a good credit history.
Criteria for Choosing a Bad Credit Credit Card
Although bad credit will stand in the way of obtaining low rates on a credit card, researching various companies and comparing offers is smart. Many credit card companies make claims of offering bad credit credit cards to help individuals improve their credit. However, some companies use this as the perfect opportunity to take advantage of people like you.
Before applying for a bad credit credit card, read the fine print for information pertaining to user fees. If choosing a secured card, you likely need to open a savings account and deposit at least $200. This deposit serves as collateral. Because your credit limit is the same as the deposit, if you refuse to pay the credit card, the lender simply claims your money.
In addition to opening a savings account, most secured bad credit credit cards have several upfront or startup fees. This might include a $50 annual fee, $10 monthly service fee, and $20 startup fee. Thus, there is a balance on the credit card before you even receive it.
Try applying with a Recommended Bad Credit Card Company on ABC Loan Guide. It is an informational loan website about various types of loans. This can help you save time and make sure you are applying with a competitive, reputable lender.
Unfortunately, extra fees on a bad credit credit card are unavoidable. However, by carefully researching different online credit card companies, it is possible to find a company with lower fees, and one that offers a lower interest rate.
View our Recommended Bad Credit Credit Card Lenders Online.
Also, view our recommended instant payday loan lenders online.
Tags: bad credit repair, bad credit mortgage loan
Popularity: 11%
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