Having bad credit is not the end of the world. You should not be overtly worried about past loan payment mistakes you made. So, your credit’s not great. It may even be bad. And now you want to know how to clean it up.
You can’t sweep late payments away or toss out charge-offs. There are no quick-fix solutions when it comes to rebuilding bad credit history. But with discipline and patience, you can rebuild your credit sooner than you think.
First you get a copy of your credit report. If you have a big debt and can’t pay the minimum balances, you may consider a debt repayment plan or credit counseling. A credit counselor can help you to devise a schedule to pay debts, but there is no signed commitment. Looking for counseling doesn’t always show up on your credit report, but you are responsible to stick to the plan.
The other solution is bad credit mortgages, it can help you rebuild your credit fast. The bad credit mortgage was created due to big number of loan seekers who fell into bad credit. If you want to apply for a bad credit mortgage, you need certain information before you start. First, make sure your credit score and report is accurate. If removing something that is incorrect from your credit report or removing old or closed accounts can improve your score, even a little bit, it is worth the effort. Then, you’ll need information on your income together with pay stubs, deposit slips and the like. Bad credit mortgage loans will often hinge on your proof of steady income. At the end, you’ll have strict repayment guidelines. Be sure you can make the payments in time and in full. Don’t make your bad credit situation even worse and don’t get in over your head.
Generally, credit scores below 600 are considered sub-prime and it will be harder for you to secure a mortgage if you have low credit score.
A mortgage is a secured loan, which means for you to put up your house as collateral. So, if you fail to pay off your loan, the lender can make foreclose on your property. So it may be difficult but not impossible at all to get a mortgage if you have a bad credit.
Those with a lower credit score are more likely to default on loans. To decrease the risk, lenders will charge you higher limit the amount of credit you can borrow and a higher interest rate (because the higher your payments, the higher your interest rate, which means you have less ability to pay back a higher loan amount). Lenders may also charge higher late payment fees.
That’s why bad credit secured mortgage is a good chance for people who have bad credit history to get a loan and try and rebuild their credit.