It sounds like a terrible diagnosis – you’ve got a poor, bad or adverse credit score – as far as a mortgage goes, surely now nobody would touch you with a bargepole?
In fact poor or bad credit is not the end of the world. Up to one in four people are turned down when they apply for credit – and the reasons why can be more complicated than you might think. Let’s look at the reasons why your mortgage application may have been rejected.
Credit Reference
There are three main agencies in the UK that provide credit references, or credit checks on individuals. These agencies provide information on previous credit agreements, such as credit cards and loans, plus any County Court Judgment on your file (CCJs). Normally when you sign the credit agreement you give consent to the agency passing on the information. CCJs are registered automatically and will remain on your file for 6 years. You can request a copy of your ‘statutory credit file’ from these agencies, and by law they cannot charge more than £2 for sending the information to you.
Contact:
Callcredit plc on 0870 060 1414
Equifax plc on 0870 010 2091
Experian Ltd on 0870 241 6212
You’ll need to give your name, date of birth, and all addresses for the past six years. If you are a business owner, give the business details too as this may provide other information.
Credit Scoring
Credit scoring differs from your credit file – banks and lenders use this point-scoring system to assess how much of a risk lending to you would represent. In fact, this is a fairly vague system, and apparently subject to secret processes that the banks are loathe to disclose. The criteria they use to assess your application includes things like; how long you have been on the electoral register, how many times you have moved recently, how many jobs you’ve been through in the past few years, and how often you’ve applied for credit.
There are also some rather peculiar cases that get turned down – such as people that have never been in debt, ever. If you’ve never had a credit card, loan or overdraft, this may actually count against you, as the more credit requests you have accepted, the happier the lender is to consider you a safe bet. In addition, people with unusual occupations may be turned down – regardless of their income.
Monday, September 13, 2010
Sunday, July 25, 2010
Debt Consolidation Loan
By John Lynch
Getting out of debt is now the great American dream. In days past, it was home or business ownership, but the slippery economy has made many people fearful. Consumers are also in debt more than ever before. The statistics are chilling. Consumers owe nearly $2.5 trillion in debt. That works out to about $8,100 for every man, woman and child in the country. Much of the debt is unsecured credit card debt too.
Credit card companies have made it all too easy to keep charging, and with the tough economy, many consumers have begun to rely on credit cards to provide food and to pay utilities so the debt continues to amass. By the time a person is defaulting or missing payments on these unsecured loans, the situation has become dire. Debt consolidation loans are often the first remedy they turn to rather than consider other means of debt relief.
Debt resolution methods are varied, and while debt consolidation loans are popular, they are also one of the most dangerous routes to take. The concept seems like a good one. Borrow money and pay off all debt, and have one monthly payment that would be lower than the sum of of those different bills. There's only one catch. In order to get a loan like that, it has to be secured. In other words, the borrower has to put up collateral, and that means having a lien against a home, other real estate property or maybe a car. Whereas credit card bills are unsecured loans, the debt consolidation loan is not. Default on it or get too behind in payments, and the lending institution can take the collateral. Losing a home is devastating.
Beyond committing to a debt consolidation loan, there are other options. Debt management and debt settlement are valid methods to gain debt relief, and neither of them require borrowing money. They work through negotiation with all creditors to lower balances and interest rates, and if the consumer is working through a debt resolution company, it results in one monthly payment. The company handles all the work. In the case of either of these options, there are certain qualifications that must be met, but if a person qualifies, it is perfectly possible to be debt free in 12 to 36 months as opposed to the long term debt consolidation loan.
While being in debt is being in the same situation as most of a consumer's friends and neighbors, there's a certain freedom and peace of mind to becoming debt free. Consumers should know that there are methods other than debt consolidation loans or bankruptcy. Debt management and debt settlement are two.
Getting out of debt is now the great American dream. In days past, it was home or business ownership, but the slippery economy has made many people fearful. Consumers are also in debt more than ever before. The statistics are chilling. Consumers owe nearly $2.5 trillion in debt. That works out to about $8,100 for every man, woman and child in the country. Much of the debt is unsecured credit card debt too.
Credit card companies have made it all too easy to keep charging, and with the tough economy, many consumers have begun to rely on credit cards to provide food and to pay utilities so the debt continues to amass. By the time a person is defaulting or missing payments on these unsecured loans, the situation has become dire. Debt consolidation loans are often the first remedy they turn to rather than consider other means of debt relief.
Debt resolution methods are varied, and while debt consolidation loans are popular, they are also one of the most dangerous routes to take. The concept seems like a good one. Borrow money and pay off all debt, and have one monthly payment that would be lower than the sum of of those different bills. There's only one catch. In order to get a loan like that, it has to be secured. In other words, the borrower has to put up collateral, and that means having a lien against a home, other real estate property or maybe a car. Whereas credit card bills are unsecured loans, the debt consolidation loan is not. Default on it or get too behind in payments, and the lending institution can take the collateral. Losing a home is devastating.Beyond committing to a debt consolidation loan, there are other options. Debt management and debt settlement are valid methods to gain debt relief, and neither of them require borrowing money. They work through negotiation with all creditors to lower balances and interest rates, and if the consumer is working through a debt resolution company, it results in one monthly payment. The company handles all the work. In the case of either of these options, there are certain qualifications that must be met, but if a person qualifies, it is perfectly possible to be debt free in 12 to 36 months as opposed to the long term debt consolidation loan.
While being in debt is being in the same situation as most of a consumer's friends and neighbors, there's a certain freedom and peace of mind to becoming debt free. Consumers should know that there are methods other than debt consolidation loans or bankruptcy. Debt management and debt settlement are two.
Solving Your Problems With Debt Consolidation
Anokwu Chimankpa Pius
In today's financial uncertainty, there are a lot of people who are
heavily in debt. This puts them in a dilemma. In times like these, a lot of people despair. To get out of this situation, there is an option you can take. You can opt for debt consolidation. With this option, you are given a chance to get back on your feet in these troubled times. The current financial crisis has put a lot of people in heavy debt. Oftentimes, this puts them in the verge of bankruptcy. This is a sad reality for a lot of people.
The inevitable is knocking on their door, and they are left with no options but to accept their fate. This will definitely affect their standard of living and the security of their families. Is there a way to get out of this ugly situation?
Thankfully, there is solution to this problem. If this is your problem, you can opt for consolidation. This option is simply taking another loan to pay for numerous loans. There is an assortment of advantages gained when taking this option. You can secure lower interest rates; you can secure fixed interest rates, or you can conveniently service one loan. These are the various reasons why people opt for debt consolidation. You can take this option to service an individual loan or a number of loans. In most cases, the financial institution that offers this service will require to secure assets to serve as collateral. The collateral required is usually property owned by the individual.
However, there are other forms of collateral that is accepted. When mortgages are secured against the properties of individuals, the individual applying for the loan enjoys lower interest rates. They can enjoy lower interest rates compared to no collateral at all. The reason behind this is that the institution can acquire the property through foreclosure in case there is failure to pay back the debt consolidation. There is less risk to the lender. This is why interest rates are offered at lower rates.
There are times when consolidation companies discount the amount of the loan. This often happens when the individual who took the loan is in the brink of bankruptcy. The consolidator will purchase the loan at a lower price. However, there are a lot of factors to be considered before the loan is purchased for consolidation.
Debt consolidation is often used to pay off a large number of credit card debts. The reason behind this is the high interest rates carried by credit cards. You can secure lower interest rates as long as you have collateral like property. This simply means that you will be able to pay off your debts in the least amount of time at more convenient rates. You no longer have to worry about not being able to settle your debts. No more bad credit; no more weight on your shoulders. You will be back in your feet in no time. This is how you solve your problems with debt consolidation.
In today's financial uncertainty, there are a lot of people who are
heavily in debt. This puts them in a dilemma. In times like these, a lot of people despair. To get out of this situation, there is an option you can take. You can opt for debt consolidation. With this option, you are given a chance to get back on your feet in these troubled times. The current financial crisis has put a lot of people in heavy debt. Oftentimes, this puts them in the verge of bankruptcy. This is a sad reality for a lot of people.The inevitable is knocking on their door, and they are left with no options but to accept their fate. This will definitely affect their standard of living and the security of their families. Is there a way to get out of this ugly situation?
Thankfully, there is solution to this problem. If this is your problem, you can opt for consolidation. This option is simply taking another loan to pay for numerous loans. There is an assortment of advantages gained when taking this option. You can secure lower interest rates; you can secure fixed interest rates, or you can conveniently service one loan. These are the various reasons why people opt for debt consolidation. You can take this option to service an individual loan or a number of loans. In most cases, the financial institution that offers this service will require to secure assets to serve as collateral. The collateral required is usually property owned by the individual.
However, there are other forms of collateral that is accepted. When mortgages are secured against the properties of individuals, the individual applying for the loan enjoys lower interest rates. They can enjoy lower interest rates compared to no collateral at all. The reason behind this is that the institution can acquire the property through foreclosure in case there is failure to pay back the debt consolidation. There is less risk to the lender. This is why interest rates are offered at lower rates.
There are times when consolidation companies discount the amount of the loan. This often happens when the individual who took the loan is in the brink of bankruptcy. The consolidator will purchase the loan at a lower price. However, there are a lot of factors to be considered before the loan is purchased for consolidation.
Debt consolidation is often used to pay off a large number of credit card debts. The reason behind this is the high interest rates carried by credit cards. You can secure lower interest rates as long as you have collateral like property. This simply means that you will be able to pay off your debts in the least amount of time at more convenient rates. You no longer have to worry about not being able to settle your debts. No more bad credit; no more weight on your shoulders. You will be back in your feet in no time. This is how you solve your problems with debt consolidation.
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