Ask Away...: Don't Let Bad Credit Hold You Back

Tuesday, May 9, 2017

Don't Let Bad Credit Hold You Back

Bad credit can feel like a horrible burden, dragging you down and preventing you from reaching your full potential. While it is a difficult weight to shoulder, and you should do everything you can to pay down your debts, bad credit is not the end of the world. You definitely shouldn’t let it hold you back from living your life comfortably. Here are a few things you can still accomplish despite your bad credit.
Renting an apartment
You probably dread apartment hunting because you know a landlord might reject you based on your bad credit, even if you have an otherwise impeccable rental history and sizeable salary. While your credit might make house hunting difficult for you, it shouldn’t stop you from getting a new place altogether. You should make it clear to the landlord that you’re willing to pay a higher security deposit, or some might ask for someone to co-sign the lease with you.
If neither of these are an option, you should look for rentals that don’t do a credit check. Believe it or not, Craigslist does have some options that could be suitable for your budget and lifestyle. Alternatively, you could search the classifieds section of the local paper, or scout neighborhoods for homeowners looking to rent their home. Renting directly from a landlord increases the chance that they’ll overlook your credit if your income and history meet their criteria.
Borrowing money
When you’re low on funds, you ask things like “how can I get a car loan with bad credit?” One of the worst impacts of bad credit is the added cost to borrow. Lenders love subprime borrowers because it allows them to charge ridiculously high rates. The best way to avoid those high rates is to resist borrowing. But that doesn’t mean you should ignore credit tools that might improve your score.
Borrowing more money once you’ve paid back a large chunk of your debt is the best way to build good credit. If you prove that you’ve made an effort to pay back your previous loans, you will find it easier to get a loan with a good repayment rate.
Getting a mortgage
It may seem like an impossible dream to qualify for a mortgage with bad credit, but it’s not as unattainable as you might think. The best thing you can do is get advice for a reasonably priced broker who knows which lenders will consider you before you even apply. Although interest rates on bad credit mortgages are higher than standard mortgages and you will probably need a larger deposit, but there are still options available.
It can help if you have  a deposit of at least around 15% or more of the value of the property. If you can get to the 30% mark or higher that would be better for your chances of being approved. While there are many types of mortgages available for those with bad credit - fixed, variable, and discounted rates - these won’t be as good as a standard mortgage

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