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EARL ON CARS | Palm Beach Florida Weekly

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There are few things more sensitive or embarrassing than having to share your personal credit problems with a stranger. Having credit problems also can put many buyers in a weakened and defensive position when buying a car. Many people with bad, or too little credit feel like the car dealer is somehow “doing them a favor” by selling them a car and getting them financed. Some car dealers will lead you to believe that your credit is worse than it is to put you on the defensive. If they can make you believe that they’re doing you a favor by getting you financed, you’re less likely to complain about the price of the car, the interest rate and the type of car you buy.

Make no mistake about it. A car dealer is probably making more money selling a car to a person with bad credit than one with good credit. If you have a credit problem, go about buying a car with the same care and due diligence as if you had the very best credit. Shop and compare your financing, your interest rate and your trade-in allowance. Get at least three quotes on each of these.

 

 

Lenders who specialize in lending to those with bad credit are known as “special finance” lenders. Many of these lenders charge the dealer a large upfront fee, as much as $2,500. Dealers also add high priced but worthless warranties to the price of the cars with the excuse that the lender requires it. This is a lie: It’s illegal for lenders to require a warranty to finance a car. In addition to an upfront fee, the interest rates are very high from special finance lenders. Because they anticipate a much higher amount of repossession losses, they must make more on each transaction. There are many conventional banks, credit unions and auto manufacturer lenders these days that loan to people with bad credit. Their interest rates are lower and they don’t charge large upfront fees.

There is much fraud in special finance lending. Credit applications are falsified to show more time on the job, higher incomes, etc. W-2 forms and check stubs are counterfeited. Buyer’s orders show accessories and equipment that do not really exist on the car. Hold checks or promissory notes are misrepresented as cash down payments. Cosigner signatures are forged. Confederates pose as employers, answering cell phones or pay phones to verify employment. If you sign a credit application, be sure that you know all the information on that application is accurate. Be sure that you understand and agree to all parts of the transaction, including down payments, accessories on the car, etc. Never be a party to falsifying information to a lender to obtain a loan. This is a federal crime.

 

 

Advertisements aimed at people with bad credit usually exaggerate with claims like, “We finance everyone,” “Wanted, good people with bad credit,” “No credit, no problem,” and, my favorite, “No credit application refused” (it doesn’t say your loan won’t be refused, just your application). My advice is to ignore these kinds of ads and these kinds of dealers.

It is common practice in Florida to encourage the buyer to drive the car home immediately upon signing all the papers. In some states like New York this is not permitted until the car has been registered with the state in the new owner’s name. The reason for this immediate delivery (commonly referred to as the “spot delivery”) is to discourage and possibly even prevent the buyer from changing his mind. Taking possession of the car is a legal consideration making the purchase more binding. I recommend that you not rush the purchase or the delivery. For one thing, you want to be sure that the car is exactly the way you want it — clean inside and out, all the accessories properly installed, no dings, dents or scratches, and that you have a complete understanding of how to operate all the features of the vehicle.

Be sure the car does not have an outstanding safety recall from the manufacturer. Independent used car dealers, especially those who specialize in folks with bad credit, have become the home for dangerous used cars with unrepaired safety recalls. Many new car dealers, like the AutoNation stores, wholesale all cars with unfixed Takata airbag recalls. These cars are bought at auction by used car dealers like DriveTime, OffLeaseOnly.com, CarMax and thousands of smaller used car dealers and are retailed to people with bad credit who don’t ask the right questions because they are “grateful” to find financing. Always check the VIN of the used car you buy at www.safercar.gov.

I mention the risk of “spot delivery” because it can be especially harmful to someone whose credit is denied after the car has been delivered. You most likely will be required to sign a “Rescission Agreement” before you drive the car home. This is a quasi-legal document that requires you to return the car if your credit is denied. You probably will be told that your credit will be approved, but sometimes the dealer is wrong. The rescission agreement will have a charge for time and mileage that you have put on the car. Usually this is a very high charge, from 25 cents per mile, plus $50 per day and higher. It can take weeks for a special finance lender to rule on a credit application. If your credit is denied, you could owe the dealer thousands of dollars that the down payment you made might not even cover.

The one thing you can do to prevent bad things from happening when you purchase a car is to choose your car dealer very carefully. How long has he been in business? What is his track record with the Better Business Bureau, the county office for consumer affairs and the Florida Attorney General’s Office? Ask friends, neighbors or relatives who have dealt with this car dealer about their experiences. Choosing a dealer with integrity will resolve 95% of all your concerns. ¦



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Bad Credit

What’s the Cost of Having a Bad Credit Rating?

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In the past, a credit rating was only important when borrowing money. Things have changed, but a good rating is still free

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Q: My partner and I are having a disagreement about credit ratings. We came into a little bit of money and it’s enough to either pay off our line of credit or save for a special trip as soon as we can travel again safely. My partner says we should pay off our credit line so that we not only have a cushion, but it will help our credit rating. He’s really concerned because when he was in university and had some trouble with debt, he felt like his bad situation only got worse because he had bad credit. I think that with so many people having lost their jobs due to the pandemic, the consequences of having a bad credit rating right now won’t be that bad because we’re all facing the same thing. We are due a honeymoon and I want to save the money for a trip because it’s the only way we’ll ever be able to go. Who’s right? ~Ross

A: Credit ratings are one of those things that most Canadians would like to know more about, but the more they learn, the more questions they have. And answers often aren’t straightforward due to the complexity of the credit scoring system. However, I’d be remiss if I didn’t commend you and your partner for having these conversations about your finances. Even if you can’t agree on everything, just talking about possible options is already more than what many couples are able to do.

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When it comes to financial decisions and debates about credit, it’s best if I steer clear of taking sides. Most of us know there are hidden perks when we have good credit; but having bad credit, it can cost us in ways we never realized. To help you both achieve a win-win, here are things to consider as you make decisions for your financial future.

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The perks of having a good credit rating

A good credit rating allows a lender to offer you a better interest rate and terms and conditions. It can make you eligible for a low-interest credit card. When you’re buying a new car at a dealership and your credit score is very high, the financing incentives can include zero per cent interest with payments spread out over an additional year or two.

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When it comes to a mortgage, a high credit rating can result in added buying power with steeply discounted interest rates and a slight easing of qualification criteria. A solid credit rating means you are able to obtain a new cellphone with a plan on contract, rather than having to pay for a device yourself first. It means your home utilities will be connected without an upfront deposit. A good credit rating means you don’t have to worry you’ll be declined whenever someone requests that you consent to a credit check.

How to Get Your Own Credit Report for Free

What does it cost to have a bad credit rating?

As you may be able to guess, a bad credit rating will limit you in terms of how much money you are able to borrow, what interest rates you’ll be charged, and what the repayment terms and conditions will be. When your credit score drops below a certain point, you are no longer eligible for low-interest credit cards and credit card instalment offers for larger purchases. Your interest rate will even go up by as much as five per cent if your credit card payments are late. Unsecured lines of credit may not be available at reasonable interest rates, if at all, and other restrictions — e.g., co-signers, guarantors or collateral — might be necessary for other types of loans.

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How to Get Out of Debt With Bad Credit

The impact of a bad credit rating on mortgage payments

When it comes to a mortgage, a credit report with a few small collection items and a record of late payments could add as much as two additional percentage points to the interest rate. That will not only decrease your buying power, it will dramatically affect how much interest you pay over the term of the mortgage.

For example, a $350,000 mortgage with a payment based on two per cent (five-year term, 25-year amortization), the base monthly payment would be $1,482. Over the course of the five-year term, this mortgage holder would pay $32,120 in interest, along with payments on the principal.

If this same borrower would have to make payments based on four per cent instead of two, the base monthly payments would increase by $359 to $1,841 and the interest paid over the five-year term would more than double to $65,153! The additional interest takes money away from being able to afford other goals. Here’s a simple mortgage payment calculator to try calculations for your own circumstances.

A bad credit rating affects more than credit applications

It used to be that a credit rating was only important when you applied to borrow money, but things have changed. A poor credit check could cost someone their dream job. Many employers ask potential employees to consent to a credit check as part of the hiring process. While they screen for a number of criteria, if someone has filed for bankruptcy, it could preclude them from working in certain industries.

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Landlords also routinely ask potential tenants to consent to credit checks as part of the screening process. Those who have trouble paying their bills on time could have trouble paying their rent. Landlords may also fear that someone with prior obligations, e.g., significant vehicle payments or family maintenance arrears, might not be able to afford the rent along with their living costs.

How to Convince a Landlord to Rent to You

As financial institutions do as well, it’s up to each landlord and employer to interpret the credit checks based on their own criteria. This means that if you need to explain your situation, it might be best to do it before they check your credit.

What does it cost to have a good credit rating?

With all the drawbacks that come with having a bad credit rating, you might wonder what it costs to have a good rating. A good credit rating doesn’t cost you anything — and it will save you money in the long run. All that’s required is that you engage in positive credit behaviours. Here are five tips to do just that:

1. Make your payments on time

On-time payments can be for the full amount that’s owing, or the required minimum payment. One of the most significant ways to protect your credit rating is to pay at least your minimums on time every month. In order to do this, you need to live according to a realistic budget and spend below your means so you’ve got enough money to bring down what you owe.

2. Plan for the unexpected – watch your credit utilization rates

Any balances you do carry on credit cards and lines of credit, aim to keep them below about 65 per cent of the limit on each account. That way if something unforeseen happens, you’re not left in the lurch trying to make bigger payments than you can reasonably afford.

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3. Demonstrate how you manage during the good times and the bad

Time provides a true picture for how responsible someone is with their money and credit. Aim to keep one older account active so a potential lender can see how you manage your affairs. If you’ve had some late payments within the last six to seven years, if they are still reflected on your credit report, they will be less significant than all of the more recent payments you have made on time to recover from the past difficulties.

It’s natural in life to hit some financial bumps, and the longer you use credit the more likely it is that there will be some reflected on your credit report. Some ways of dealing with financial trouble wipe the slate clean, which is why lenders look at your overall financial picture as part of a credit application. A balanced approach tends to be the strongest: spending within your means and based on a steady source of income, using credit wisely, managing routine payments and obligations, saving in proportion to your level of income, and having some assets to show for your spending. It raises red flags if someone has been actively using credit for a number of years, but their credit report offers no meaningful information about their credit accounts.

4. Only keep and apply for the credit that you actually need

We all know that person who has so many credit cards in their wallet that it hardly closes. But a lot of credit doesn’t necessarily mean they have a good credit rating. In fact, it could signal a problem. Only apply for credit that you actually need and will use.

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Pay off and close any accounts you don’t use regularly and don’t really need. This protects you from giving in to temptation simply because you have credit available to you. It also protects you from fraudulent activity on an account you don’t use regularly. The first thing a fraudster would do is change your address and contact details so you don’t get their bills. By the time you’ve caught on to their spending spree, the damage could be done.

5. Not all credit is created equal

When there isn’t much to report on your credit file, potential lenders and interested parties might look more closely at the types of debts you do have. Different types of credit shed light on how you handle your money overall. For example, deferred interest or payment plans can indicate you aren’t able to save up for purchases ahead of time. Consolidation loans mean you’ve had difficulty paying your debts in the past. A line of credit is a revolving form of credit, like a credit card, and it’s easier to get into trouble with a revolving form of credit than with an instalment loan, where you make payments for a set period of time and then it’s paid in full.

How to deal with debt and save for a goal

When faced with a sum of money you weren’t expecting, consider how to make it work hardest for you toward your most meaningful goals. Pay off an expensive debt and then keep making the payments you were making on that debt into a savings account instead. You’ll save money on interest by paying off the debt offand also be able to save up for an important goal. This is a particularly effective strategy when interest rates on saving accounts are as low as they are now.

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Should I Pay Off Debt or Save Money?

If you have more money than what’s needed to pay off an expensive debt, consider whether it’s better to pay down another debt with the leftover sum, or to jump-start a savings account with it. If you have quite a few debts to take care of and not enough money to pay them all off, consider how best to use the sum you received while employing the snowball or avalanche method of debt repayment. Just be sure to execute your debt repayment plan within a realistic budget that also accounts for some savings. That will protect you from relying on credit and seeing your progress evaporate should you face an unexpected expense.

The bottom line on what your credit rating means

The best things in life are free, and this certainly applies to having a good credit rating — especially when you consider how painfully expensive the alternative is. No one thinks about what a bad credit rating will cost until they’re faced with the consequences. Only by then, it’s often too late to turn things around quickly. While negative information on your credit report is frustrating, with some patience and corrective steps, time is on your side to (re)build an excellent credit rating.

Related reading:

7 Things That Are Not on Your Credit Report

What are Your Bad Habits Really Costing You?

5 Credit Myths Debunked and What to Do Instead

Scott Hannah is president of the Credit Counselling Society, a non-profit organization. For more information about managing your money or debt, contact Scott byemail, check nomoredebts.orgor call 1-888-527-8999.

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Bad Credit

Fixed-rate student loan refinancing rates do not budge from record low set last week

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Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

The latest trends in interest rates for student loan refinancing from the Credible marketplace, updated weekly. (iStock)

Rates for well-qualified borrowers using the Credible marketplace to refinance student loans into 10-year fixed-rate loans continue to stick at record lows during the week of May 10, 2021.

For borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender during the week of May 10:

  • Rates on 10-year fixed-rate loans averaged 3.60%, the same as the week before and down from 4.35% a year ago. This marks the second week that rates have not budged from 3.60%, the record low set last week.
  • Rates on 5-year variable-rate loans averaged 3.18%, down from 3.19% the week before and up from 3.03% a year ago. Variable-rate loans recorded a record low of 2.63% during the week of June 29, 2020.

Student loan refinancing weekly rate trends

If you’re curious about what kind of student loan refinance rates you may qualify for, you can use an online tool like Credible to compare options from different private lenders. Checking your rates won’t affect your credit score.

Current student loan refinancing rates by FICO score

To provide relief from the economic impacts of the COVID-19 pandemic, interest and payments on federal student loans have been suspended through at least Sept. 30, 2021. As long as that relief is in place, there’s little incentive to refinance federal student loans. But many borrowers with private student loans are taking advantage of the low interest rate environment to refinance their education debt at lower rates.

If you qualify to refinance your student loans, the interest rate you may be offered can depend on factors like your FICO score, the type of loan you’re seeking (fixed or variable rate) and the loan repayment term. 

The chart above shows that good credit can help you get a lower rate and that rates tend to be higher on loans with fixed interest rates and longer repayment terms. Because each lender has its own method of evaluating borrowers, it’s a good idea to request rates from multiple lenders so you can compare your options. A student loan refinancing calculator can help you estimate how much you might save.

If you want to refinance with bad credit, you may need to apply with a cosigner. Or you can work on improving your credit before applying. Many lenders will allow children to refinance parent PLUS loans in their own name after graduation.

You can use Credible to compare rates from multiple private lenders at once without affecting your credit score.

How rates for student loan refinancing are determined

The rates private lenders charge to refinance student loans depend in part on the economy and interest rate environment but also the loan term, the type of loan (fixed- or variable-rate), the borrower’s credit worthiness and the lender’s operating costs and profit margin. 

About Credible

Credible is a multi-lender marketplace that empowers consumers to discover financial products that are the best fit for their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 4,300 positive Trustpilot reviews and a TrustScore of 4.7/5.

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Bad Credit

Bad credit loan guaranteed approval online (In a business day)

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Bad credit loan guaranteed approval

(YourDigitalWall Editorial):- Pennsylvania , United States May 10, 2021 (Issuewire.com) – Do you have bad credit? But in need of money? You can still get a bad credit loan guaranteed approval from various websites.

Bad Credit Loans is one of the websites, which has been in the business of helping people. They make it simple for consumers to get the funds they are looking for online.

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They can help connect you to lenders that offer loans that may work for you. Their lender network includes state and Tribal lenders. Tribal lenders’ rates and fees may be higher than state-licensed lenders and are subject to federal and tribal laws, not state laws. Your credit history may impact whether a lender offers you a loan and the terms of your loan, but some lenders in our network may offer loans to borrowers with all types of credit.

Bad Credit makes it amazingly simple to check online whether you qualify for the loan. You just need to fill the convenient online form and will receive an offer in a few minutes from the network of lenders and financial service providers.

If your loan gets approved, funds will get deposited into your bank account electronically deposited in one business day. The loan offer you receive is free to use, and you are not obligated to accept the offer if you are not willing to.

With Bad credit loan, the best part is your credit need not be perfect to consider for a bad credit loan as even with poor credit you can still qualify for the loan while meeting the following requirements:

  • The Minimum age must be of 18 years.
  • Proof of documentation-proof of citizenship or social security number.
  • Regular income-full-time, part-time, self-employed, disabled, social security benefits (anyone).
  • Checking account in your name.
  • Telephone numbers-residence and work
  • A valid email address

Apply now and get a $5000 bad credit loan guaranteed approval

 

 

 

 

      



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