When individuals fail to pay their credit card bills, this directly affects their credit scores. And qualifying for another credit card would be like trying to go through the eye of a needle. But there is another way – unsecured credit cards. Unsecured credit cards are for those who either have no credit or those with bad credit problems. A security deposit is not a requirement as it is with a secured credit card. The advantage to having this is that despite the poor credit score one is able to obtain a card, but the disadvantage to this is it involves higher interest rates. The main purpose of an unsecured credit card for bad credit is to be able to restore the credit score once one is able to settle credit card debt.
But that’s not all it takes to raise your credit score. To quickly improve your credit is to show creditors that in spite of having a less than average credit you don’t need the new credit. In other words, you need to keep your balance way below what’s expected. For example, if you have a $500 limit, your balance should be below $100. By showing self-control, your credit score may rise up to 35%.
Unsecured credit cards have high interest rates and annual fees to dissuade a user from carrying a balance. It is important for bills to be fully paid each month. It usually takes about a year of disciplined-use of the card to be able to acquire a credit card with better terms.
When choosing to get an unsecured credit card, be sure to study the fine print; some of these have high fees. There are also times when offers come through mail. These may seem to be ‘easy to get credit cards’, but don’t be fooled. There will be fees attached to these in order for the company to recover the cost of sending out the mail that may amount to more than $200. Also, late payments will come with high fees and interest rates.
The best way for those with bad credit to obtain an unsecured credit and also in order to avoid any problems with fees and interests is through a known bank. The idea is to be able to revive the credit score and not make it even worse; unreasonable fees will not help it. Although getting an unsecured credit card after bankruptcy would require collateral because of the credit card history.
The recent economic downturn in America has affected the credit rating of many people across the U S, and even more are caught with credit card debt, and people are finding it hard to figure it out how to pay their balances.
Debt settlement is strongly being advertised these days, and you might be thinking whether it is a legitimate step towards credit restoration or is it just a scam? To answer this question, you need to differentiate between debt settlement and the companies offering their services for this purpose. As far as debt settlement is concerned, it is purely a legitimate process. By using this method, those companies to whom you owe are asked to accept less than your full balance and consider your debt paid in full. If this happens, no doubt it is big relief.
Now you should be conscious about debt settlement companies. Those asking for enormous upfront payments should be considered a scam, and you need to look for legitimate companies who are working according to the prescribed law which can be of help. First and foremost people need to get their debts settled in order to avoid bankruptcy.
You might be thinking what is the impact of debt settlement? It is largely dependent upon current status of your credit report. If you have an average credit score rating, settlement of the debt will be something worse for your credit standings. On the other hand, if your credit score is already considered to be in a bad state then settlement of the debt is the only option for you.
It is important for you to know whether debt settlement is right for you or not? If you do not need it and you are attempting to settle your debt, this can be extremely detrimental to your credit score. You should remember that debt settlement should be used only as a last resort, and if you can find an alternative, then that is recommended. If you find yourself in a situation where there is no other way, only then should you go for this option.
There could be a lot of reasons why you would need a $50000 loan. Pay off some overdue bills, start a business, buy a car or do some work to your home. Whatever the reason, consumers need to shop around for the best deal just like they would with anything else. You wouldn’t buy the first car you went to look at, or even the second or third. Why borrow money from the first or only lender you see? Some important things to shop for in a loan would be a good interest rate and a manageable length and payment on the loan.
If you own a home talk to your mortgage holder about possible options. This is a good place to start because your mortgage holder already has a relationship with you and there may exist an opportunity to borrow against your home at a good rate and with better terms than could be found with a company where no prior relationship exists. This avenue would be especially promising if the money being borrowed were used to improve the home. This way the increased value of the home works to offset the money borrowed against its value.
Another good place to shop is with your insurance company with whom you have a life insurance policy. Some policies allow the insured to borrow against it after some value has been accrued. This would be another company that you already have a relationship, hence you may get a better deal or a discount.
Of course there is always the traditional route of going to a bank or other unsecured money lender. It can be very difficult to get an unsecured loan of more than 40000 or even a $20000 loan. Generally speaking a person must have excellent credit and employment history. Even if a borrower has these things rates and terms for these loans can still be less desirable than secured loans because of the greater risk that the lender is taking.
Do you own shares of stock? Many people have monies invested in 401k/retirement stock plans or own volumes of stock. These same people may be unaware that many stock brokerages will lend up to 50% of the current market value of the stock to the shareholder. This is another form of secured debt and as always, the borrower should pay close attention to the details of the loan such as interest rate, payments and other terms.
If you are a student, student loans are a great way to help pay for school and everyday expenses. Lenders usually pay out more than tuition if applied for and rates from many private as well as federally funded loans are extremely low. Many of these types of loans also do not go into repayment until the person is finished with school.
As you can see there are many options for borrowing mid-size chunks of money depending on your specific situation. Whatever option you choose remember to get detailed information about every lender you interview and compare it to other lenders. Information from one source may look appealing such as a lower payment however there may be other details that make the loan not worth while. Trust in the relationships you have already established rather than being lured in by promises from a company you aren’t familiar with.
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When you are looking to borrow money, do you want to go with the company that approved $50000 loans last year or $20000 loans? That could depend on many things, so you need to stop and think about this. Do they handle only certain types, as in mortgages, or are they open to any kind? Do they only work with businesses or are they open to anyone? Do they handle bad credit as well as good, and do they offer unsecured as well as secured loans? Also, what is their rate of default?
Once you know these basics, then you should take a good look at your credit rating, what you need the money for, and if it will be secured or unsecured. Of course, if you are looking for a loan to buy a house, and you have a significant down payment with A-1 credit, as long as the approved value of the house is as much or more than you are paying, you should have no problem as long as your income proves you can afford it. The real problem would be trying to borrow $50,000.00 without security, a bad credit rating, and no income, or not enough to look like you can pay it back. Then you may have to go to a lender who can get creative. This, however, can get you into even more trouble, so you need to be careful.
A lot of people, though, are able to do just that, although maybe not for $50,000.00. When someone has had a lot of small bills that they are unable to keep up with, they get a consolidation loan, which pays off these bills so that they only have one payment left. Of course, lenders will consider what type of bills they are, and how you accrued them. Medical bills are one of the most popular bills with the lenders.
When you are looking to borrow money, a bank is usually safer than a lot of finance companies, but there are also very legitimate finance companies. If you are turned down, really look at the reason, maybe you cannot afford this payment and should try to get by without the money.
People with bad credit often worry that they will never be able to take out a loan. Loans can be extremely helpful at certain times in life. Whether you are trying to send your kid through college or just want some extra money right now to go on a trip or buy some new furniture, the options for what you could do with the money are endless.
Even if you have bad credit you can get $3000 loans but you just need to make sure you go about things the right way.
The first step to getting a $3000 loan with bad credit is taking the time to look over your credit report. Make sure there are no inaccuracies and if there are, deal with them right away. These will have a negative impact on your credit report and if you are not responsible for them you can get them taken off your credit.
It is also important to look thoroughly at your report and see who you owe money to. Credit cards will have the most negative impact so get these paid off first. Obviously you do not have the money to pay off everything or you would not need to apply for a loan in the first place but you can make as much of a contribution to paying off your debts as you can.
Try to do this at least a few weeks before actually going to apply for the loan. This will give some time for the effect to take place and show on your rating.
Consider using a co-signer. This is someone with better credit than you whom you could use to help you get approved for the loan. If you have poor credit, lenders are going to look at you as a liability. They assume, and for good reason, that you will not pay the loan back because you have not paid off your other debts. A co-signer will greatly improve your chances of being approved.
A credit card debt settlement letter is posted out by the credit card company when seeking an arrangement to clear your credit card debt over an agreed schedule of payments. Settling your credit card debt in this manner can be an acceptable method to get past old debts that continue to hang around.
How much can you offer? That will depend on your income and spending. If you don’t already have a reliable budget drawn-up, you will need to put one together so that you are not negotiating blind when telephoning the credit card company. To do this you it would be helpful to locate your recent bank statements, credit card statements and any sales receipts you have lying around. You can use these to create a spending plan to cover the next few months. Remember to include the yearly expenses that it is easy to forget. This will create a surplus when you add your income and deduct your planned expenses.
What if your surplus is pretty small, or even negative, and you want to raise it? You can take on an extra job, or you can attack your spending to slash the cost of living your life. The choice is yours. Most find it easier to look at their daily and weekly spending to see what they can do to cut expenses. Over the years the expenses creep up because we’re really not paying attention to them. This is your chance to do so. Changing some habits, switching to lower cost brands or having a few less treats can help drop your expenses fast.
When you have your monthly surplus up to a respectable amount, you are ready to call the debt negotiator. Once you have reached an agreement, the credit company will post out a credit card debt settlement letter for your review. This will detail what has been agreed over the telephone. Make sure the details are correct and then you’re good to go.
When thinking about negotiating settlement credit card debt you want to focus on how you can benefit from it. There are several ways to do so. Past interest and fees can be deducted from the current balance, and you can agree to a fixed monthly payment, with less or no future interest charges, until the account is cleared.
Negotiating means talking with a debt collectors usually working for the credit card company itself. They have some quality training like anyone in their respective fields. This training will have shown them how to talk and negotiate with debtors (that is you), how to manipulate your emotions to elicit the reaction they need in order to get the most money out of you. Sound a little over the top? You’d be surprised. Debt collectors often work partly on commission, with department bonuses for top collector. There are, however, some ways you can combat this.
To start with you will want to know as much as you can about your own situation. This means your wages and your spending. To do this you can monitor how you spend money from now on, but it is faster to go back in time by looking at past checking account and credit card statements to review past spending. From there you can construct a spending plan. See if you have some surplus to put toward debts each month. What if you don’t?
Living below your means has become quite popular, especially lately with the recent difficult economy. It means to spend less than your wages. Even if you don’t do this right now, you can start. You can cut costs at the supermarket by picking cheaper brands and reduce the little luxuries to be less frequent but still an enjoyable part of your week. This will free up some much needed cash.
Negotiating settlement credit card debt is pretty easy to do once you take the above steps one by one. Take the first step today.
Photo: Andres Rueda
Hiring a credit specialist can be a good way to help get out of debt if you are experiencing problems. The specialist can help to communicate between yourself and those who you owe the money to as well as any credit reporting agencies involved. The main goal of a professional credit specialist is to help minimize any damage that your credit history may suffer when you cannot pay for the money you borrowed. However, they cannot legally erase credit card debt but they can help you to solve other problems with credit debt.
A good credit counselor will help to put you back on the road towards getting a good score on your credit. If you have a bad credit score you cannot buy simple products like electronics or furniture. To buy most of these things you will need a reliable credit score otherwise you may not be allowed to purchase them through financing. This can be problematic especially if you don’t have a lot of initial money to work with.
By working with a specialist you will be able to build up your credit score again and start making regular payments toward your debt. They will be able to tell you what you are doing wrong and give you advice on some different processes of credit like budgeting and keeping track of the amount of credit you pay each month.
Even with a specialist helping, you will still have to change the way you make payments. Bad credit habits are likely what caused this situation in the first place so you have to do things differently. A specialist may be able to give you some advice on this but ultimately it is your decision whether or not to implement it. It is easy to buy finance multiple items at once, but later you may find that you cannot make all the payments on time, this is the type of thing that leads to a bad credit history. Buying items that you don’t need is also unnecessary and you may be spending money that you’ll need later.
Lots of people who’ve had debt problems in the past and decide they can’t live without a credit card look online specifically for credit cards for people with bad credit. The best advice, however, is to decide you don’t need credit cards and avoid them.
It’s not easy to live without credit cards today. With salaries seeming to get smaller and the price of everything going up, sometimes floating credit from month-to-month seems the only way a person can get by. But the best thing you can do for yourself and for your future is to avoid these types of credit cards at all costs.
Credit cards for people with bad credit might sound like a good idea because you can reestablish your credit and be able to afford things that you might not have the cash on hand to buy right now. The problem is you’ve already shown yourself that you have trouble with debt. While bad credit can come from circumstances beyond our control, very often we have it because we overspend and then have trouble keeping up with the payments. Have you mastered that problem? If you have any doubt then credit cards that are aimed at people like you who’ve had credit problems are only bound to get you in deeper.
Even if you’ve paid off all of your debt and you get one of these cards, you can run up a bill very quickly. Yes, many of them have low credit limits to start but they tack on monthly fees that you pay for the privilege of getting the card and they have extremely high interest rates. You can very quickly let the amount you owe spiral out of control. These cards, unless you can truly budget yourself and manage them well, will often just help you get back into debt problems and make your credit even worse.