If you have bad credit, chances are good that you have taken out a payday loan at least once. So new legislation introduced today may affect your bad credit and your borrowing. The Payday Lending Limitation Act of 2010, sponsored by U.S. Sen. Kay Hagan, seeks to curb practices of payday lenders considered abusive, practices that often turn short-term emergency borrowing into long-term, expensive lifestyles. The bill would modify the Truth in Lending Act to make payday loans less onerous for the people with poor credit who relay on them. Continue reading ‘More Regulation for Payday Lenders’
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You had to get a co-signer on your mortgage because you had no credit, or even bad credit. This nice person enabled you to buy your home. You don’t want to repay her generosity by ruining her credit, do you? Because if you don’t pay that mortgage on time, the late payment shows up on her credit report and lowers her credit score. In addition, the lender can chase her and harass her to collect arrearages and late fees owed by you. Not nice. So here’s what you do. Continue reading ‘I have a co-signer and can’t pay my mortgage. What now?’
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Somewhere among the hundreds of pages of proposed consumer financial protection making its way through the House and Senate are provisions that may affect anyone who looks for a bad credit mortgage or subprime home loan. The new bills will give a new Consumer Finance Protection Agency (CFPA) the authority to abolish prepayment penalties on high-interest bad credit mortgages. Continue reading ‘Feds Take Aim at Subprime Mortgage Prepayment Penalties’
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A new mortgage law in Georgia offers extra protections to people with bad credit looking for home loans. In the past, some bad credit lenders in Georgia were able to make loans to people who could not afford to repay them, and they were able to overcharge for these loans too. Senate Bill #57 has been passed and sent on to the Georgia State House of Representatives for approval. Here are two important protections the bill as written would provide: Continue reading ‘Georgia Subprime Mortgage Law Offers Protections for Bad Credit Borrowers’
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If your credit score has taken a beating lately, you are not alone. Unemployment or under-employment has strained many budgets and caused credit score drops across the board in the American population. While many blame credit cards for ruining their credit as companies increased their interest to criminally-high levels, other people with bad credit are using credit cards to help repair their bad credit scores.
Credit cards can help increase your credit score, but you have to be smart and careful in choosing and using them. First, you need to decide on an unsecured card or a secured card.
If you have a poor credit score, unsecured credit cards will likely only be available at a very high interest rates. That’s fine, if you have learned to budget and manage credit as part of your rebuilding strategy. You should plan on never carrying a balance with this card, only using it for smaller purchases and paying it off each month. If you think you may not have the discipline to do this and a high interest card is your only option, you may want to pass and look into getting a secured credit card. Or get some credit counseling before you take on a high-interest rate card.
A secured credit card is great for building credit, and comes with a lower rate in most cases. However, it does require you to deposit money into an account that secures the card. Ian addition, fees can be prohibitive–don’t pay $200 for a card with a $300 limit. Wait if you have to; better deals will come along eventually. In addition, remember your reason for getting the card — make sure the creditor reports your good behavior (it IS going to be good, right?) to the credit bureaus before signing up.
When you figure out what credit card to use, make only smart and affordable purchases. You will want to stay within your personal budget so as to avoid missing a payment and be consistent with your credit card repayment plan. By doing so, you be able to more easily repair your credit score in a way that shouldn’t cause you financial strain.
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Bad credit lenders, like all mortgage lenders, are usually on the up and up. However, there are some bad apples who don’t honor their disclosures, engage in discriminatory practices, bait and switch their interest rates, or take advantage of less sophisticated borrowers. If you think you’ve been had, what do you do?
Continue reading ‘Where to Complain’
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Okay, you’ve burned every bank in town and your credit report is a series of repossessions, charge-offs, and collections. No lender will touch you with a ten-foot pole. But blood is thicker than red ink, right? Well, maybe. If you are going to borrow from or lend to a friend or relative, read this first — doing it right can save your finances and your relationships.
Continue reading ‘Should People with Bad Credit Borrow from Family and Friends?’
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Yes, you can recover from bankruptcy, and it’s not as hard as you think. People who file for bankruptcy protection may feel embarrassed and hopeless. But the purpose of bankruptcy is to give you relief, a second chance, a new start. Dump the bad feelings and prepare to restart your life. Continue reading ‘Mortgage After Bankruptcy’
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If you have bad credit, mortgage problems aren’t the only thing you have to worry about. Sub-prime credit cards — also known as fee-harvesting cards, come with itty bitty credit limits and fees that make you broke before you buy a thing.
The CARD Act, whose major provisions go into effect Feb. 22, 2010, limits the fees on cards for people with bad credit, so the card companies are scrambling to protect their profits with monstrous interest rates — and whatever else they can get away with. Continue reading ‘Bad Credit Subprime Credit Cards to Get More Expensive’
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The surest way to clean up bad credit is to pay your bills on time for six to twelve months; at that point your scores should have improved substantially and with another six to twelve months you could even have good credit. But for many people, paying on time is not simple. If you have a checking account with electronic banking and a debit card, you can simply pay your bills automatically, or online in seconds, or call and pay with your debit card, or even use the snail mail and send in a check.
But for those without a checking account, paying bills on time is a greater challenge. Say you get your paycheck on the first and it’s Friday; your mortgage is due on the 5th. So on Monday you go to the bank your employer uses (and the branch might be on the other side of town — there goes your lunch hour), you cash your check and buy a bunch of money orders to pay your bills (or you head to a convenience store because the money orders cost a lot less there), you make another stop to buy stamps, then you pull everything together and mail in your payments. A simple task like paying a few bills can take hours — and if you get sick, have a family emergency, or work a double shift, you may end up paying late despite your best intentions.
“Second chance” checking accounts help those who are listed in Chex Systems or Telecheck. If you have been denied a checking account because of bounced checks in your past, you may be able to join decent society again with a second chance checking account. Second chance checking accounts are offered by banks and credit unions. They may require a substantial deposit, and there will likely be monthly maintenance fees. Look for an account that will convert to a regular checking account if you don’t bounce any checks for a certain length of time. Some of these even come with financial management counseling to help you improve your payment history.
Second chance checking accounts can help give you a fresh start and improve your credit rating. By making bill paying easier, you improve your likelihood of paying on time. Start yourself on an upward trend — get a checking account, improve your payment history, qualify for lower interest rates, pay off debt, get a better mortgage, save money.
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