May 10, 2013
Obtaining zero down auto loans might seem impossible if you have bad credit but it can be done. You’ll just have to work a little harder when it comes to finding a perfect dealership that accepts bad credit. There could be 2-4 dealerships in your city that will accept bad credit so it’s always a good idea to call around. Ask some of your friends where they got their first car when they were younger and didn’t have good credit. They’ll give you a few places that you can use so cross your fingers that they are still in business.
In order to obtain a zero down auto loans, you can always get a co-signer. This is basically a person who will take responsibility for the vehicle if you do not pay. Being a co-signer is a huge job and most people will not want to sign because they don’t want to take the risk. So seriously, how can you get someone to sign for you? This is fairly easy – just ask one of your family members or a very close friend. There are some people who are willing to sign and they know where to find you in case you don’t pay up. This is why you should make sure you can get a car you can afford.
There are many cars available on the lot. Remember that you will have to pay monthly so the car can be anywhere from $150 to even $500. We don’t recommend paying $500 a month for a vehicle because most of the time, this will be out of your budget. Low payments are considered to be anywhere from $150 to $250. Middle range goes up to $350 while anything more than that might seem ridiculous for someone who is not expecting to pay a lot of money. Most cars that are brand new will be on the high end and this is why a used car is best.
To get zero down auto loans, you should be able to show a good proof of income. Since you have bad credit, the dealership will need to prove that you are working each day and that your income is more than the car payments are each month. Remember to write everything down accurately on your application, otherwise you could be denied. You obviously don’t want to purchase a car that you are not able to pay for. A car salesman will only show you cars that fit your budget and if you want something that is a little better like GPS or some car that is upgraded, this may be difficult to get.
Almost everyone pays a down payment at the dealership. Those with good credit don’t have to. Since you are a liability, you probably will have to put a down payment on the car. Now, you can always talk your way out of this. If you have an old junk car, you can always trade this for the down payment. Most dealerships will be able to accept these car and sometimes sell them for parts to other companies. They will look over your car and see if it’s worthwhile.
No one wants to give a down payment most of the time and some people will try to get around it when it comes to zero down auto loans. You can simply say to the dealer that you have good credit so you won’t be a problem in case something were to happen. They can work with you and even lift the down payment so you’ll be only paying for the car each month. A down payment is only used to protect the dealership in case anything happens to the car. People with bad credit will almost always have to pay a down payment before they actually get to drive the car anywhere but this is not the case for you so don’t let a car salesman push you for a down payment. Most dealerships can do without.
Overall, it is always a good idea to get everything organized before you walk into the dealership and demand cars with zero down auto loans. Gather up all of your income stubs and a recent credit report if you don’t want to wait for the credit approval process. You can also call them to give them your details and they can run the credit approval beforehand. Otherwise, you will need to wait a few days and this will delay the process of getting a vehicle so if you need a car quickly, always make sure you are prepared. By showing them all of your documents, they can give you a car without any down payment.
, personal finance
May 8, 2013
Your credit card, while serving as a powerful tool for all your financial needs, can lead you to a world of trouble if you don’t use it the right way. Credit cardholders must avoid getting trapped in a deep hole called debt. However, they often find it hard to consider the immense amount of expenses, especially if a bank already gave them enough credit to just charge these costs. Moreover, this powerful financial tool can oftentimes be considered as the worst form of finance because of the fact that incurred debts are classified as unsecured. Also, they carry an interest rate that is higher than a home or car loan. Compared to other types of loans such as home mortgage or student loan, credit card debts are not tax deductible.
If you have a credit card, you don’t want to use it on certain things or events that could definitely spell disaster on your financial and economic standing. In fact, many experts say that you should not use it in these situations:
- Paying for your college tuition. Using the credit card while in college is never good to begin with, because of the consequences that doing so may bring. Many college graduates have experienced dealing with credit card debt during their time at school, and their financial woes continue to pile up as they advance in age. For one, upon graduation from college, you might not be able to find a job at the soonest possible time, which would make it hard for you to earn income to pay off your credit card debt.
- Paying for your wedding costs. In such a prolific event like a wedding, planning is a key priority. Saving for years with your soon-to-be wife or husband for the significant day is a very important way if you want it to be extra special and start your married life on the right track. However, you shouldn’t use your credit card in financing your wedding costs, as this will backfire, causing you newlyweds to deal with debt during your first few years of marriage.
- Going on a vacation spree. If you are planning for a vacation, it is best that you save on cash money for your out-of-pocket expenses rather than using your credit card all throughout your out-of-state or out-of-country trip. Financing your trips through the use of your credit card will just create a mountain of debt upon your return.
- Paying for your medical expenses. Dealing with the costs of your medical treatment can be very daunting, but that does not mean you should resort to using your credit card to finance them. Some health providers offer rate adjustments and payment plans that might be suitable for you.
Using your credit card is still important, but using at frequently and as a means of covering much of your finances is not good at all. Next time you encounter the abovementioned situations, think twice before dealing with your finances. Use your credit card in moderation, or suffer consequences along the way.
Steven Boccone is a New York-born economist, financial analyst and manager. He has worked for various financial institutions worldwide and currently manages a US-based global marketing company. He is an art lover, a traveler, and he maintains his own business blog.
, Credit Card
, Credit Card Debt
, financial planning
March 6, 2013
A credit card is a form of loan, albeit one involving more flexible terms and smaller sums of money than a personal loan or a mortgage. However, like other types of loans, credit cards also have interest rates. You need to understand more about how interest rates work, and how they will affect you and your finances, before taking out a credit card.
Why interest rates can be confusing
At the moment, credit card issuers can choose one of 14 different methods for charging interest. These methods involve calculating interest in different ways. So, if you have two credit cards which seem to have the same interest rates and you use them in exactly the same way, one could cost you more because the provider has decided to use a different method to work out that interest.
Another reason why interest rates are confusing is because the industry uses acronyms such as APR to talk about interest. APR (Annual Percentage Rate) is a standard way to work out the cost of credit, taking into account the interest rate and any other charges. This rate shows you how much it will cost to borrow money over the course of a year.
It should be the case that credit cards with lower APRs give you the best deal, but it doesn’t always work out that way. This is because many cards start and stop charging interest on transactions at different times. However, most lenders offer a ‘typical APR’ when advertising credit cards. This is because when you apply for a credit card, you may be offered a rate based on your credit history and personal circumstances. According to a Guardian factsheet, banks only have to offer their advertised APR or a better rate to 66% of potential customers.
When interest rates will affect you
If you pay your balance off in full every month, you probably won’t need to worry about interest rates. However, interest rates will affect you if:
You only make minimum payments off your total balance every month
You pay anything less than the full balance each month
You use your credit card to take money out of a cash machine
If you meet any of these criteria, you should be looking to find the lowest interest rates when carrying out a credit card comparison. If you do your research and take the time to work out how much a credit card will cost you in the long term, you are likely to end up with a good deal and a way of borrowing money that suits you.
, Credit Card
, financial planning
, Interest Rates
February 27, 2013
Although your bad credit score can sometimes feel like a rain cloud looming over your chances for financial freedom, there are opportunities for the sun to shine through. It’s not all bad news when it comes to your poor credit score, because despite common misconceptions, you can receive a credit card, apply for student loans, and access emergency cash. And the best part of all is that it is always possible to repair your credit score.
Credit Card Options
Applying for a credit card is a great way to build your credit, but unfortunately your bad credit score can limit your credit card options. Don’t be discouraged though, because there are multiple ways in which you can still receive a credit card despite your low score.
People with bad credit often take the secured credit card route. A secured credit card functions much like an unsecured credit, but you pay a security deposit and a monthly fee. You also will most likely experience a lower credit line, which reflects the value of your cash deposit. Only consider this option though if you can pay your monthly dues, otherwise you will very quickly rack up late charges and high interest.
You can also apply for a credit card with a cosigner who has a good credit score. It’s important however that both you and your cosigner understand that if you fall behind on payments, your delinquency will affect not only your credit score, but also your cosigner’s credit score. You won’t want to jeopardize your cosigner’s score on top of your own, so refrain from involving a cosigner if you are unable to make timely payments.
Students Loan Opportunities
Fortunately, you’re not out of luck when it comes to financial aid for higher education. Although you may not qualify for all loans, you do have options.
One option you can turn to is a private student loan through lenders such as Chase, Citibank, and Wells Fargo. In the same way that you can apply for a credit card with a cosigner, most of these lending houses will require a cosigner with an upstanding credit score. In this case, the cosigner agrees to pay for the loan if you fail to make payments. These loans are often associated with higher interest rates though, so only sign on if you understand all of the terms and conditions.
You could also apply for scholarships and grants to receive funds for school. Institutions will award you scholarships based on your athletic or academic performance, while they link grants to your financial situation and need. Scholarships and grants are more attractive options because they are monetary gifts, which you do not repay.
Emergency Loans Access
While your bad credit score will make it difficult to take out traditional loans from banks and lenders, there are bad credit loans, which can help cover life’s unexpected emergencies. Payday Loan lenders usually do not review your credit report, but they do generally expect you to repay the loan by the following payday. Failing to meet payment deadlines will result in expensive fees and high interest, so it is best to only take out this loan if it’s a one time situation, if you understand the terms of the loan, and if you are able to repay the loan.
You Can Always Improve Your Score
It’s never too late to start building your score, and because it can take years to recover from financial delinquency, it’s best to start fixing it now. Begin by repaying any debt that you owe. This may mean contacting your creditors to establish repayment plans, but be sure to demonstrate your willingness to pay back the money.
While you will want to continue using your credit cards to build your credit, use them sparingly and only for small purchases that you are capable of paying on time. In addition to paying your credit card bills on time, you should strive to pay your rent, utilities, and any other bills on or before their due dates as well.
Make a conscious effort to cut back on spending, save money, and consider consulting financial advice if your finances seem unmanageable. Bad credit is not a permanent situation, so take the time to improve it so that you can experience a brighter financial future.
Chloe Mulliner is a writer and editor for several consumer websites related to credit and personal loan options.
, Credit Score
, personal finance
February 23, 2013
There’s a lot of buzz about the implications of bad credit and the importance of maintaining good credit, but many of us are still unclear about certain aspects of our credit reports. How long does a bad payment last on your record? Can you receive a loan with no credit history? And what about your job, is it really legal for an employer to snoop at your credit report? The following top three things you should understand about your credit report will answer all of those pressing questions and more.
1. Bad Credit Will Hang Around
Your credit history from today and two years back accounts for around 70% of your credit report, while the other 30% dates back seven to ten years. Good credit can hang around for around ten years while your last payment delinquency may show up for seven years. This is important to keep in mind, because one bad payment can haunt you for years, despite the fact that you’ve maintained a clean record ever since.
With that being said, your credit score can change on a day-to-day basis for various reasons such as if you apply for a new credit card, declare bankruptcy, or miss a payment. Generally though, your score will not change more than 30 points in one quarter. In addition, your credit score may vary depending on which of the credit bureaus reports your score, as each has their own scoring methods.
2. You Can Still Receive Loans With Bad or No Credit
If you have poor or no credit, there are options available that may prevent banks and lenders from turning down your loan request. eCredable.com, for example, offers you an All My Payments (AMP) credit rating, which takes into account your monthly payment obligations such as rent, utility, and cell phone bills to help establish your creditworthiness. These kinds of payments generally do not show up on the traditional credit bureau reports, but they can provide proof of your payment history. Some, but not all lenders will accept this form of nontraditional credit worthiness.
In the case of an emergency, you can apply for loans for people with bad credit. Typically, these bad credit lenders do not ask to see your credit report, so it usually does not matter if you have bad or no credit. But because payday lenders are taking a risk by supplying you with a loan, they do charge high interest rates and fees. Only apply for a cash advance if it is an emergency situation and if you are capable of paying back the loan in short order. Also, read and understand all of the loan terms before applying.
3. Your Future Employer May Judge Your Credit Score
While it’s not uncommon for credit card companies and landlords to check out your credit report, now potential employers are gathering around to sneak a peek too. And yes, it is perfectly legal for them to do so. A 2010 Society for Human Resource Management survey revealed that 60 percent of employers conduct credit checks on prospective job candidates.
These employers are using your credit score as a judgement of your character and financial reputation. Employers, especially those in financial fields, want to determine your level of monetary responsibility before allowing you to handle company finances.
Even though a bad payment can stick around on your credit record for a while, this should not discourage you from taking strides to improve it. And regardless of whether you can still borrow money from a lender with poor credit, your future employer may want to see your score, so you should always build your score to the best possible number to help prevent any possible obstacles. If you’re still experiencing uncertainty when it comes your credit score, do not hesitate to contact a financial advisor or credit counseling organization.
Chloe Mulliner is a writer and editor for CreditSources.org, a website dedicated to personal loan options, emergency cash advances, and credit cards.
, Credit Score
, financial planning