No Equity Home Loan

No Equity Home Loan - Avoid costly mistakes

Lenders assign you a credit score whenever you apply for credit. This is a way for them to decide whether you are a likely candidate to give credit to, or not.

The credit score is a 3-digit number, typically in the range 300 to 850th In the lower end 300 means that you have very bad credit and it is unlikely to receive a loan and at the other extreme, a credit score of 850 would have the lender salivating at the possibility of loan you a pile of money .

Although there are no hard and fast rule about how the credit score is calculated (and many institutions have their own formula's adapted from the standard way to calculate) here is a general guide to how it is intended (these figures are approximate).

35% of your score will be based on how the time your payments are (or how late they are / have been).

30% of your score will be based on the total debt you currently have in relation to how much credit you have. You would add up the total balance on all your debts to get the first number, and then add up the total credit limits on your cards and other loans to get the second number.

15% of your score will be based on the amount of credit history on file.

10% of your score will be based on the type of loan (this area is a little vague and can be tailored to each lender).

10% of your score will be based on the amount of credit recently received, and / or the number of applications for new credit.

Remember that these figures are indicative only and there will be many overrides built into the systems, each lender. For example if you had some very late payments that could get your score well above 35%. Also, your score will be dramatically reduced by such things as bankruptcy, foreclosures, and judgments.

There will usually be a process where the lender will enter your information into their computer system, and if the score came out lower than the minimum they have decided on a particular loan will get your application rejected.

When considering an unsecured consolidation loan, we suggest that you do some careful research first.

So what can you do to improve a poor credit rating?

1. If it does not already do it, you make all payments on time, or even a little early. To pay a little extra can also help in some cases.

2. Get all the convictions you have on your credit report for unpaid accounts sorted out. Either pay the account, which in some cases will have the item removed from your credit report (if not eliminated, at least the lender will see that it has been made), or double check it is correct (sometimes inaccurate information being disclosed on your report). Sometimes using a credit repair company, it is possible to get credit repair. Remember to do your homework in order to find reputable companies.

3. Cut down the amount of requests you make on credit.

4. Consolidate your debt. For example, if you have three points of credit, get rid of two of them and only use one.

Or have reduced credit limits on your credit card. Sometimes a lender will look at the total amount of credit you have available, and decide not to lend you money, because that number is too high! Reduce your credit limits on each card and / or reduce the number of cards will help here. Unfortunately, this can sometimes work against you as well if the lender believes you have done this purely to get the loan.

5. Savings - Sometimes demonstrates a decent amount of money you have saved over a period will give the lender confidence in your ability to manage money.

6. If you have neglected accounts now, get them now current, and contact your creditors immediately to discuss - Do not wait until the situation worsens.

The problem with poor credit does not disappear quickly from his own account (usually an item on your credit report can take up to seven years), so prevention is the best cure is to pay your accounts on time.

If you are stuck with a bad credit now and need a loan bad credit lenders who specialize in lending money to people in your situation. You will usually have to pay a higher interest rate, but this can usually be a good way to start getting your credit score improves.