Things You Should Know When Applying for a Loan

by: admin - February 9th, 2012   Filed under: Loans, Personal Finance Add Comment

Life happens. Due to any number of factors triggered by the economy, job loss, spending or unexpected emergencies, you may be short of funds. If you do not do something, you will not be able to pay your bills and creditors will come calling.

If you have savings, these can be used to ease the pressure. You can also talk to those to whom you owe money, asking for an extension or, in the case of credit cards, a better rate that will result in lower monthly payments. After exhausting all avenues to ease your financial situation, a loan may be the only other option available.

Loans are not “free” money and must be repaid. Before applying for a loan, there are some factors you need to consider.

Receiving a regular loan is based on several factors, including your credit score, your past credit and payment history, and what assets you bring to the table. For some companies that offer “quick loans” these will not weigh as heavily for or against you as when you apply for a loan at a bank or credit union.

Regardless of where you apply for a loan, know where you stand financially before applying. This means listing all your debts and bills so you know what you already owe. List all sources of income and other assets such as stocks, bonds, savings and real property such as cars, land or a house. Knowing where you stand financially helps you know what you need and what you can afford to repay.

Before applying for a loan, make sure you obtain a copy of your last tax return. Many financial institutions will want to see this as part of the application process. While you should always keep a copy filed away, if you do not, you can obtain one by asking for a copy on the IRS website.

Know your credit score. FICO® scores are used to assess your worthiness to obtain a loan. Before a lender will be willing to take a chance on giving you a loan, most want to know your credit score. The score reveals how diligent you’ve been in paying what you owe because it reveals your credit history. The lower the credit score, the more difficult it will be to obtain a loan from a bank or credit union. However, many companies that offer “quick loans” take into consideration that a low credit score does not mean you won’t repay a loan. “Quick loan” companies will look at more than your credit score before deciding if you are a good risk for a loan.

Before accepting a loan of any kind, know how much interest you’ll be paying on the loan. Also inquire about any fees and charges that may be added to the loan. Fees and charges can greatly increase the amount of the loan, making borrowing prohibitive. Find out before signing papers so you aren’t shocked afterward to discover your loan costs you far more than you believed.

 

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Debts That Cannot Be Settled

by: admin - February 9th, 2012   Filed under: Debt Relief Add Comment

Although debt settlement has helped many people who felt overwhelmed by their debts, several people have realized that there is a limit to what debts are allowed to go into settlement. Understanding the limits on settlement is important to anyone who is considering this path to reducing or eliminating their debt.

During a debt or loan settlement, a consumer will typically contract with a professional who will negotiate with creditors on his or her behalf. Some debts, such as credit card accounts, are excellent candidates for loan settlement. In general, debts that are unsecured are good candidates for settlement because the lender realizes that they do not have the legal right to seize assets from the borrower. Because of this, these lenders are more apt to go into settlement negotiations in the hope that they can recover some of their investment.

In return, a consumer who goes into loan settlement will often see their credit score drop as a result. Negotiating with creditors is a sign that a borrower is in distress, so many banks see the drop in credit score as justified. In actuality, however, the drop in credit score is a result of the missed payments and debt charge-off that occurs during settlement. Typically, a consumer will lose about fifty points off his or her credit score for each debt that goes through the settlement process, but this number can be more or less depending on the credit score that the consumer had prior to beginning the settlement process.

Lenders who make secured loans, that is, loans that are tied to an asset that the lender can repossess in the event that the borrower doesn’t make their payments are not as apt to negotiate with loan settlement companies. While this doesn’t necessarily mean that these loans cannot go through the settlement process, they are a lot less likely to be eligible. Auto loans and mortgages are the most common examples of this type of debt.

Instead of going through settlement, many consumers will choose to negotiate with these creditors on their own. There are many options available to people who need to reduce their secured debts. These loans can be refinanced with a minimal impact on a credit score, or in more extreme cases a borrower can go through a voluntary foreclosure or repossession. This second option can impact a credit score by about fifty to one hundred points, much less than the two hundred points or more that an involuntary foreclosure or repossession can cost.

Loan settlement can be a good decision for a consumer who is struggling to make his or her debt payments every month, but the consequence can be a lower credit score. While the drop a consumer sees on his or her credit score will typically be less than the two hundred to three hundred point drop that a consumer who goes through a bankruptcy will experience, it may still effect his or her ability to qualify for the best loan and insurance rates.

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Declaring bankruptcy can recover your credit rating- Know how

by: KevinC - September 14th, 2011   Filed under: News & Updates

If you are planning to file for bankruptcy, which is as useful as other debt relief programs and feeling worried about its after effect on your credit ratings, then it’s important for you to consider a few essential details first. The general notion is bankruptcy remains on your credit report for 7 to10 years and the three digit number of your credit score which finally exhibits your creditworthiness gets affected by it. However if you understand a number of financial factors which play a crucial role in determining the effect of bankruptcy on your credit report, you can certainly minimize the effect of bankruptcy on your credit score and frame your finances in a better way. Creditors usually scan through your credit report to evaluate the credit risk they incur while offering you a loan or credit line. To find out how bankruptcy affects your credit rating you first need to understand how credit score works and on what basis your FICO score is calculated. Read on to know more about these financial factors which can help you to rebuild your credit score after bankruptcy.

Past Payment History

You might be surprised to know 35% of your credit rating depends on your past payment history which consists of bankruptcy filing and your late payment records. While you file bankruptcy it adversely affect your past payment history and consequently damage your credit score. However, after bankruptcy ideally the creditors that were discharged have no legal rights to report any negative information such as late payments, foreclosures or
repossessions on your credit report as these all take place after filing bankruptcy. It will certainly help an individual who have a long history of late payments to rebuild his credit history without having any discharged creditors spoiling your credit report.

Debt Amounts

30% of your total credit score is determined by the debt amount you carry. When the creditors weigh whether you can handle your debt responsibly or not, they often tally the amount of debt you have incurred from credit cards, mortgages and other loans with your available credit limit. Therefore, the debt amounts receiving a bankruptcy discharge have positive impact both on your debt amount and your credit report. The debts that have been already discharged through bankruptcy are no longer are regarded as valid obligations that you have toward the creditor, therefore the debt amounts is reported as a $0 balance. This bankruptcy discharge often results in an increase in your credit score, especially when the balances on your credit report being listed as $0.

Credit History, Credit Mix

15% of your total credit score is decided by the duration of your credit history which indicates how long an account has been open and the most recent transaction in the account. 10% of your total credit rating is influenced by your credit mix. Credit mix denotes the types of credit accounts you currently have. If you have a variety of credit accounts it certainly works in your favor when potential creditors assess your credit.

After declaring bankruptcy almost all of your credit accounts get closed. As a result both credit history and your credit mix get affected considerably. However, after filing bankruptcy if you apply for new credit accounts you won’t face much difficulty to reestablish a credit history with a mix of accounts.

If you have fighting spirit and a strong urge to bounce back you can not certainly recover your credit scores from a bankruptcy filing and can lift your FICO score after receiving a discharge. Remember, you need to attain at least 2 to 3 years of positive reporting history, in order to reestablish your credit history. The effect of bankruptcy on your credit score is largely dependent on the choices you make and the credit history you decide to create after filing bankruptcy.

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Welcome

by: admin - July 4th, 2010   Filed under: News & Updates

Welcome to The Credit Express!  The Credit Express was designed with the typical consumer in mind…you don’t have a lot of time to research what credit card is best for you, but you still want to get the right card for your financial needs, with the right terms.  Relax, we’ll do all the leg work for you!  Our offers are always current, in fact, our site updates instantaneously, so if a new offer comes up, you’ll see it right away!

And, you can always trust our links to be safe and secure – so you can apply online, directly from this site, and not worry about your privacy or your identity!  We don’t sell, share, or otherwise distribute ANY information gathered by this site. 

So, grab your current credit cards, and compare them to ours!  Chance are, we can save you big!