Bad Credit Loan Information

Having bad credit can be a very difficult situation for you to deal with. There are many different ways that you can get a bad credit rating. One of the biggest mistakes you can make is not paying your bills on time or even worse, not paying your bills at all.

Your credit rating is vital to your financial health and well being. Anytime you want to apply for a loan, the creditors will contact the credit reporting companies to determine if you are a good credit risk or a bad credit risk.

Whether you are applying for a home loan or simply buying a new car you need to address all of your credit history issues before you begin the process.

Bad Credit and Getting a Home Loan (Mortgage)

Most of us have the dream of owning your own home. In order to accomplish that goal, you will probably have to borrow money, which is called a mortgage. If you have bad credit, most mortgage companies do not want to loan money to people with bad credit. However, there are bad credit mortgage lenders that will help you if you have low income or a bad credit score.

The bad credit mortgage lender can help you get a home loan approved quicker than you could by a bank or credit union. The unfortunate part is that you will probably have to pay a higher closing fees and interest rate.

You should always compare the interest rates with several of the bad credit mortgage lenders. With the current interest rates being so low, you should be able to find a bad credit mortgage lender that has reasonable interest rates.

Another thing to be aware of is that your bad credit mortgage loan doesn't carry a pre-payment penalty. Some bad credit mortgage loans have a 6 month to 3 year pre-payment penalty. That means that you will have to pay a large amount of interest for at least 6 months before the loan can be paid off.

New law Promotes Access to Free Credit Reports
The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies; Equifax, Experian, and TransUnion to provide you with a free copy of your credit report, at your request, once every 12 months.

The Federal Trade Commission (FTC), the nation's consumer protection agency, has prepared a brochure, "Your Access to Free Credit Reports", explaining your rights under the FCRA and how to order a free annual credit report.

A typical credit report includes information on where you live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

How do I order my free report?
You can order your free annual credit report online at annualcreditreport.com, by calling 1-877-322-8228, or by completing the" Annual Credit Report Request Form" and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. 

When you order, you need to provide your name, address, Social Security number, and date of birth. To verify your identity, you may need to provide some information that only you would know, like the amount of your monthly mortgage payment.

For People on Debt Management Plans: A Must-Do List
Reputable credit counseling organizations employ counselors who are certified and trained in consumer credit, money and debt management, and budgeting. Those organizations that are nonprofit have a legal obligation to provide education and counseling.

But not all credit counseling organizations provide these services. Some charge high fees, not all of which are disclosed, or urge you to make "voluntary" contributions that can cause you to fall deeper into debt. Many claim that a debt management plan is your only option before they spend time reviewing your financial situation, and offer little or no consumer education and counseling.

Others misrepresent their nonprofit status or fraudulently obtained nonprofit status by misrepresenting their business practices to regulators. You need to spend the time to learn more about companies that want to help you repair your bad credit.

Fair Debt Collection
If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor." If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a "debt collector."

You should know that in either situation, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe.

What debts are covered?
Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts.

Who is a debt collector?
A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis.

Before You File for Personal Bankruptcy:
Information About Credit Counseling and Debtor Education Produced in cooperation with the Department of Justice's U.S. Trustee Program The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 launched a new era: With limited exceptions, people who plan to file for bankruptcy protection must get credit counseling from a government-approved organization within 180 days before they file. They also must complete a debtor education course to have their debts discharged.

Counseling and Education Requirements
As a rule, pre-bankruptcy credit counseling and pre-discharge debtor education may not be provided at the same time. Credit counseling must take place before you file for bankruptcy; debtor education must take place after you file.

In general, you must file a certificate of credit counseling completion when you file for bankruptcy, and evidence of completion of debtor education after you file for bankruptcy - but before your debts are discharged. Only credit counseling organizations and debtor education course providers that have been approved by the U.S. Trustee Program may issue these certificates. To protect against fraud, the certificates are produced through a central automated system and are numbered.