Do You Have Too Much Debt?
With the hard economic times, life is a drag. Add that to having debts and you might have a big mess in your hands. The following are some of the indicators that you are headed deeply into debt.
First, when you realize that you use a huge part of your income to pay your credit card debt yet all you can make is the minimum, you are headed towards financial disaster. If you are still using the credit card, all you are doing is getting into a bigger debt.
If you are afraid of taking a phone call to avoid lenders, then you should realize that it is futile and you are already in a financial crisis. If you have to borrow money to make monthly payments, then it is obvious that you are living at the margin of a financial crisis.
You need to have optimum output in your workplace. If you are constantly thinking about your debts in your workplace and it is negatively affecting your work, it means you are more in debt than you are ready to admit.
If you find yourself engaged in alcohol and narcotics, you are likely trying to escape the reality because your debt is too much.
Finally, if you are hiding your spending habits from your friends and relatives, it may be because you feel your debt can embarrass you once your friends know about it.
A Variety of Loans for Consumers with Credit Struggles
Having bad credit does not necessarily suggest that you are doomed from borrowing or accessing loans. In actual fact, there is a wide variety of loans that you can still access even with bad credit. Although having a low credit score may equate to higher interest rates, you are eligible for most of the personal loans that do not entirely focus on your credit stand. However, you need to consider a reputable lender who would agree to lend you money even with bad credit such as a credit union which actively seeks for new borrowers. Below is a summary of these types of loans for bad credit.
Secured Personal Loans
This type of loans is one of the best options if you have a bad credit. You are eligible to apply for higher loan amount and will receive more favorable terms such as lower APR. Basically, this kind of loan is backed by some kind of security such as a car, home, or saving account.
Co –Signer Personal Loans
This is where you approach a co-signer who has a better credit to sign for a loan with you. In this case the lender uses the co-signers credit to decide the terms of the loan including how much to lend. However, the co-signer is absolutely under risk should you fail to repay the loan.
Bad Credit Auto Loans
This is basically loans for car buyers who have bad credit but their terms such as amount of loan applied and APR are favorable; i.e. lower amount and higher APR. In this case, such borrowers are considered the best as compared to those with better credit yet have unfavorable terms.
Cash Loans for Poor Credit
This kind of loan is mostly applicable if you are employed. In this case, you are eligible to borrow or apply for loans as long as you accept some deductions on your salary to repay the loan. There are several options that provide Cash Loans for Bad Credit to people that are struggling to obtain financing.
This is the type of loan where your car title acts as the security in borrowing a loan and the lender disregards your credit status.
These types of loans are just among the loans that you can still apply for even with a bad credit. You should therefore allow your frustrations to fade in case you had been worried about accessing loans due to bad credit.
Is Poor Credit Irrepairable?
If you have poor credit, you risk being denied financing opportunities by several lenders. However, you do not have to worry because there are several ways you can repair your poor credit. Here are some of the ways.
Take care of your credit card balances: One major factor in your credit score is the amount of revolving credit that you have versus the mount you are actually using. The smaller the percentage the better for your credit score. To repair your poor score, pay down your balances and keep them low.
Pay your bills on time: Your credit score is determined by what is in your credit report. So, make sure that you clear your bills on time month after month and your score will rise.
Minimize the amount of debts you owe: Reducing the amount of debts you have will go a long way in improving your credit score. You can do this by stopping using your credit cards, develop a payment plan and avoid moving forward your debts.
Ensure you are not a victim of credit fraud: If you are a victim of credit fraud, you score goes down. So, learn to prevent credit fraud and know the actions you should take to restore your good credit if you fall a victim of such.
Always check your credit report: You can repair your poor credit score if you know what it contains. By doing so, you will be able to remove negative details from your report. In addition, you will stop bad credit habits and restore good credit history.
How Young People Can Build Credit
Credit building is the process of increasing the credibility associated with the handling of personal cash and related cash matters. This portrays the responsibility level in terms of spending and controlling cash. There are various challenges associated with building credit. Credit score for young people can be boosted by ensuring the following:
- Pay all outstanding bills on time
- Avoid exceeding credit limits.
- Open more than one accounts credit line but avoid too many still.
- Open checking and saving accounts to ensure they have a backup in case of bad debts.
- Leverage on parents credibility by requesting to be added as authorized users to the parent credit card.
- The young people can also take out secured credit cards and connect it, to report to all the credit bureaus.
- They can also use their rent payments as a resource for credit creation if they pay on time.
- They can also take out store cards and ensure that they settle the debt by the end of each billing cycle.
Young people below the age of 21 years need a co-assigner to help in building credit in case they need to take credit cards on their own. They can also prove that they are earning on them self or they have the means to settle the debts. Since most of the young people do not have the credit history required by the banks in order to portray a capability to repay, it is advisable for young people to take secured credit cards and use them lightly while repaying in full each month.
For effective credit building, they should avoid overspending on the card as it can turn out to be a big burden at the time of repayments. If still in school they can apply for student loans, open installment or revolving accounts. Finally, they should ensure that they check their credit score once every year for free.