Possessing low credit score could be a disadvantage when trying to acquire credit. However, poor credit is not a hindrance anymore since several lenders today offer credit and loan programs for customers with low credit score.
On this post, let us talk on ways you can get a bad credit credit card and a bad credit mortgage loan.
Credit Cards for Those Who Have Poor Credit
It can be technically simple to get a bad credit card and you may select from several options. Such as, you can actually choose between a secured credit card and an unsecured bad credit card. These cards are accessible for people that have poor credit. However, secured credit cards require a cash deposit while a bad credit card doesn’t.
Since unsecured credit cards for bad credit do not involve a cash deposit, the interest rates and the charges are expected to be more expensive than secured credit cards.
Meanwhile, the security deposit required for most secured credit cards range from $200 to $500 and above, depending on the card holder’s desired limit.
You may also consider prepaid credit cards or prepaid debit cards if you have bad credit. Prepaid cards do not provide credit lines as secured and unsecured bad credit credit cards do. However, prepaid cards are much easier to obtain because you don’t need to go through the traditional application process. All you need to do is deposit the minimum required amount to your account to start using the prepaid card for payment. When the balance runs out, the card holder must submit a new deposit or reload the account to use the card for new transactions.
Bad Credit Home Loans
We have just discussed credit card options for people with bad credit but what about home loans? Is it possible for you to get a mortgage loan if you have bad credit history? In reality, getting approved for a home loan would be a big challenge if you have bad credit because many lenders want solid assurance that the borrower is capable of repayment. Nonetheless, bad credit home loans do exist in the market.
When seeking a bad credit home loan, it’s best to personally speak with a potential mortgage lender rather than just submit your loan application online. This way, you will have the chance to explain to the loan officer the circumstances that lead you to have bad credit, as well as the steps you already done to improve your credit rating. If the loan officer can see that you are capable of repayment, then you are more likely to get an approval and you might even be able to ask for a low-interest rate.
Don’t forget to check your personal credit report prior to submitting your home loan application. Thus, you can be sure that your report does not contain errors which could be pulling down your score lower. In case you find items in your report that needs to be corrected, send a letter of dispute immediately to the bureau that issued your report. Doing this step is crucial since even a few points can make a big difference in the loan rates you will get.
