With all the talk of the economy, it makes you wonder what really happened. Ultimately, it was everyone’s fault; the banks and the consumer. The banks offered products they knew they shouldn’t have, and the consumer took loans they knew they couldn’t really afford. So now, in the fray of what’s happening there is danger lurking with too many low credit scores. Some may now have scores so low, that there isn’t anything the banks can do for them; this includes getting an FHA loan.
A low credit score poses a real problem. Why? Because virtually anything you do is based on your credit. Buying a home, buying a car, and even getting your car insurance will really be hard when you have a low credit score. So, known what makes it low will help you understand what life changes you may need to make, and what things you can do going forward to prevent this from happening again.
If you are paying your bills on time that is great, but you may have too many of them. Continuing to open new accounts will drive your score down, making it nearly impossible for you to balance out your debt to income ratio. You also need to keep in mind that the more of your credit you use, the more your payments will go up with your revolving accounts. With a mortgage and a car loan things work a little differently, as they are a fixed interest loan. A fixed interest loan means that you will have the same rate and same payments for the life of your loan. Revolving debt pertains to credit cards, or lines of credit on the home. The rates adjust with the prime rate and any additional add-ons the bank has, thus driving up your payment. Once you exceed 40% of your available credit on any account, this will give you a low credit score. It shows the lender or bank that you are not able to manage your credit or that you are planning to use more credit, so beware.
Paying your bills on time is great, but remember cash is king! Don’t borrow anymore than you need to no matter what the case may be. Always try to go the way of paying cash, for the exception of your home mortgage. Pay cash for cars if you can’t, but if you can’t this is a new trade line or account that you can use to help build your credit up. Building your credit up and sticking to your guns on cash will keep you away from a low credit score.
Payday loans are a quick and easy option when you need money in a hurry. Life can throw curve-balls at us all and sometimes we just aren’t prepared financially. Luckily, payday loans can take away some of the sting of being pitched a ball you just weren’t ready for. Continue reading to learn more about this loan option when you feel like your hands are tied.
What is a payday loan? In simple terms, it is a loan that should help carry you to your next payday. It is not a large loan and you do not have to go through a complicated process to receive it. Nearly anyone who is able to prove they have a job can qualify for this type of loan.
What if I have bad credit? Typically, credit is not considered when qualifying for a payday loan. There will be factors the lender does consider, such as employment and where you live, but most of the time your credit report isn’t part of the picture.
How do I pay back the loan? The procedure for paying your loan off will depend on the lender. Some lenders require the loan amount and interest paid back within a month or so. Other lenders allow you to make monthly payments to pay the loan off. Either way, you will be advised off the payoff process while you are going through the loan process.
All in all, a payday loan is a good option for many people who may find themselves in a bind. Bad credit is no problem and having a steady income along with a place of residence are the biggest factors. Should you find yourself in need of a little help to make it to your payday, a loan is always a good option.