Bad credit can negatively affect you in so many different ways. It can not only stop you from getting that dream house you were planning to buy, but it can also prevent you from buying a car or from renting an apartment. It can hinder your ability to buy all sorts of products and services.
Improving your credit score is not that difficult if you know what to do. You can check your credit report and find out what’s wrong with it. If there are any errors, you should dispute them with the credit bureau until they’re fixed. You should also make sure that you don’t have too many open accounts or loans because it will lower your score.
Until then, all is not lost. There are many ways you can achieve your dreams even with bad credit.
Make a Large Down Payment
Houses and cars typically come with a standard down payment, such as 20%. But if you can and are willing to pay a higher amount, it can often offset a bad credit score. This is because it not only gives the lender greater collateral, it shows the lender that you are a serious person who should be taken seriously.
If you get turned down for a loan because of your credit score, offer to double or even triple the standard down payment. You have nothing to lose by offering. The same thing applies to renting an apartment. If they turn you down, offer to pay three or even four months of rent upfront. Make them an offer they can’t refuse.
Check Your Credit Report
Do not make the mistake of believing that a credit report can’t have mistakes. Search online for how to get credit report for multiple ways to obtain yours. Once you have a copy you will need to study it line by line. If you find mistakes, send a certified letter to the credit bureau detailing them. Also, do not forget to provide documentation to prove your case. Removing even small mistakes from your credit report can cause your score to rise enough that it can turn a rejection into an approval.
Provide an Explanation on Your Credit Report
You might not know this, but your credit report is not a one-way street. You can actually provide input. You can attach a 100-word explanation to your credit report, which every creditor will see whenever they perform a credit inquiry. Perhaps you had a medical emergency that caused you to fall behind on your payments, or maybe there were some other circumstances beyond your control. Write it down, and be as honest and forthcoming as you can be. Creditors could very well take it under consideration.
Make Use of a Co-signer
Another way to overcome bad (or even nonexistent) credit is to make use of a co-signer. A co-signer is someone who takes responsibility for repaying the debt if you can’t. If you have a family member or an excellent friend with excellent credit, ask them if they would be willing to do this. But only ask them if you are confident that you can pay off the debt because if you can’t, they must.
Consider a Signature Loan
Not all loans require great or even good credit. A signature loan, such as those offered by King of Kash, can be obtained by just about anyone. With this type of loan, not only do you not have to worry about credit checks, there are no documents to provide, and you do not need any collateral.
Author Bio: Tom Holcom is a free-market economist and an eCommerce fanatic. He teaches his readers about how they can optimize their daily spending and take advantage of the emerging opportunities to make some extra money on the side. In his free time, he feels there’s nothing better than grabbing a bike and making a dash along the busy city streets, admiring the atmosphere and the busy workings of our society.