The Bad Credit People Have New Hope
When the banking crisis hit, it changed the financial world forever. Many Americans were left with no option but to declare bankruptcy, even if they had never missed a payment in their life. It's a stigma that many are trying to fix, while others have given up on ever getting themselves back on their feet financially. If this is you, don't worry: you can still make an effort and be successful at finding a new job or lender that will consider your case.
This blog post will introduce you to some of the best places online and offline to help you break out of those bad credit brackets and find something better.
Meet with your creditors.
This is a tough one, but often the only way to get out of debt. By meeting with your creditors and letting them know you are willing to work with them, you can often convince them to lower the payments on your loans or give you more time to pay them back. Some creditors even have programs that will reduce the interest rate if you meet certain requirements like paying off other loans or increasing the amount of your payments.
In many cases, this is a better alternative than declaring bankruptcy so that you do not lose any credit for future use. This is also a good idea if you have not had any late payments and are just suffering from high debt as a result of medical bills or other reason.
Be willing to negotiate.
Often people with bad credit feel like they are facing an uphill battle in convincing creditors to lower their interest rate or interest payments. In most cases, the best thing you can do is be willing to negotiate with them and ask for that discount rather than defaulting on the loan. This is often the only way that you will get your lender to recognize your importance as a customer.
Just be sure not to bite off more than you can chew and expect that the lender will reduce your balance significantly, especially if it still has some liability left over.
Look online.
Many people assume that you must go through a bank to get a loan for something like student loans or other resources. However, that is not necessarily the case. There are many websites and companies out there that will allow you to obtain a loan or loan modification without even having to do anything more than filling out an application and submitting your information.
This is often better for your situation as the interest rate is often lower or even market rates. You will want to ensure that you compare all options with your current lender but at least this way, you can save some money in the long run by avoiding large fees such as late payment or overdraft penalties.
Visit local credit unions.
Credit unions are among the best places to find loans for those with bad credit. Many of these institutions still consider the applicant on their own merits and without credit, are more likely to offer you a better rate. Others will give you a lower interest rate than your current bank but at least they are focused on helping members get back on their feet financially and will pay some attention to your case.
Visit bankruptcy sites online.
Depending on your situation, there may be debt consolidation or bankruptcy companies that can help you if you have stopped making payments or have had some late payments made toward your loan. These companies will often work with your creditors to find a mutually-beneficial solution for everyone.
Be persistent and don't give up.
Often, people that are having trouble paying off their debt do not stick with it long enough before deciding to call it quits on their obligations. Once you realize that you are going to have to change something in order to work your way out of debt, do not give up so easily. Try several different tactics and find the one that works the best for you. Just remember, if you are working on a loan modification, do not stop making the minimum payment and keep track of future payments as well so that you pay off your debts more quickly.
Be an outsider.
If you have bad credit and are looking to find a new job or lender, make sure that you know that they do not know who you are. This is a good tactic since many of the lenders will only give you credit if they are told that you meet their standards for being approved. In order for this to work, keep in mind that lenders will want to know everything about your financial situation going back two or three years.
Request that information up front so do not give it to them later on when they ask for it. If this all goes well, tell them upfront what your financial situation looks like now and why it is important that they approve you as a customer today. This will help you maintain your reputation and show the company that they should not worry about your ability to pay off your loan.
Use social media.
There is not much you can do when it comes to a creditor or potential lender seeing you on social media since they already know who you are, but that is not always the case in other aspects. Since employers are also concerned with the credit rating of their staff, one of the best strategies is to use social media sites like Facebook to connect with them and show them what kind of person you are. This will help those that are more likely to hire someone with poor credit see how well-rounded you are as a person and how dedicated you can be when it comes to being a valuable employee. If you do this well, you may be able to convince them to give you a loan in the future.
Loan modification programs are also beneficial for those that have had trouble paying off their debt so if possible, look into these as well.
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We are using the personal finance information from SeekCredit . The information on this page is based on the US market, and may vary from country to country. International students should check with their home country's bank to see what services they offer. Have a question about your personal finance situation? Check out SeekCredit's Questions section or Ask a Question to Ask the Community . Need more advice? Compare your credit score by using our quick comparison tool . If you need help or advice with your finances, check out my Financial Advice and Stories for Students Hub . Updated January 2018
There are plenty of reasons why someone might need to improve their credit score -- whether it be for a car loan or perhaps even financing for a first home. What if you find yourself in a situation where you have to move, but really need to improve your credit score? If you want to be able to get a loan for a new home or apartment, here are some tips that can help! 1. Create A Budget Having a budget is the first step in learning how to manage your money. Write down everything that you spend money on each month. If possible, go ahead and try to cut expenses out of your budget first before worrying about spending money on anything else. Think about things like eating out each week or buying new clothes all the time . . . do those things REALLY matter? If not, cut them out of the budget! 2.
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This was a great article on improving your credit score. I had no idea there were so many things you can do to get that positive credit rating back. Can you tell me what one step you will take today or tomorrow to improve your bank account position? Thanks! Reply Delete
Hi, I have been watching the articles and wondering why it is so much better in the US than here in Australia...we still don't seem to have the same opportunities as others around the world for getting a car loan etc. Hopefully some time soon we'll see some improvements...thanks Reply Delete
I wonder if there's anything I can do to improve my poor credit score.