You can successfully boost your ability to get credit card, mortgages etc. despite having a troubled financial history if you’ve the right information. Listed below are 7 common questions that people ask about bad credit history:
1. Is there anything called ‘credit blacklist’ in the financial world?
No, there’s none. Every bank or online lender has a different set of requirements. The tools used by these organizations also vary. If one bank says ‘No’ due to your poor credit score, it doesn’t mean you simply cannot avail home loans with bad credit! There is a way out!
2. Do banks care just about money or risks too?
All lenders try to strike a balance between the profit margin and risk involved in all transactions. If you’ve bad credit history, you’re likely to be perceived as a risky customer. However, you’d most likely be prepared to agree to a slightly higher interest rate too.
3. Is bad credit alone the reason behind mortgage application rejection?
Not at all! There are numerous other reasons for rejection of home loan applications including but not limited to erroneous information in financial records. Stale mobile numbers or other details can also lead to rejection.
4. Is there any way to boost my credit score?
Yes. There are plenty of ways to boost your credit score and they do not include - ‘paying a hefty fee to a credit repair agency’- the technique everyone thought works but actually doesn’t. Pay utility bills, get on electoral roll, do away with old accounts or update them, pay subsequent debt payments on time - these are all ‘working’ methods to fix bad credit history.
5. Do lenders ever make an effort to understand the reason why I’ve a bad credit history?
If you apply for specialized bad credit home loans, you sure will have the opportunity to explain the reason why you had trouble managing your finances. There are experts you can sit down with, and explore various bad credit mortgages options in detail.
6. Can borrowers with mortgage arrears and/or unpaid defaults qualify for a bad credit home loan?
In most cases, the answer to this question is a ‘Yes.’ You shouldn’t, however, approach nonconforming lenders to make it happen. You ought to do the opposite.
7. Can I get home loans with bad credit without having to agree to a very high interest rate?
Specialized lenders provide different types of bad credit home loans schemes to people with bad credit history. In most cases, you’d be required to pay a higher down payment, have someone co-sign with you, agree to a slightly higher loan interest rate or provide collateral of some sort. Overall, the process is fairly easy and doesn’t take more than few days to complete