Bad Credit Strategies

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Maybe it’s a sign of the times, but over the last few months I have been asked more and more about how people with bad credit problems can get out of their situation. The term bad credit usually pops up when people are applying for loans, and in a lot of cases the applicants don’t even know of the problem until this point. one of the most common issues to arise are underpaid telecommunication company bills. As a general rule, a lot of these companies are very quick to list a late or slow payment, even if it’s only $20 or $30. these issues are easily dealt with, and it is usually also a good explanation and no further problems arise.

The real crunch comes, when people simply cannot make the payments because they are overburdened with too much debt, and it is here that the real problems begin. There are, however, some easy ways to overcome these problems. I will be writing a detailed report over the next few weeks, which will outline the steps required to refinance existing debt into more manageable proportions. You can also check out this web site for some great assistance on Home Loans if you have credit problems.

Home Loan Help If You Have Credit Problems

For the time being, however, I would like to point you in the direction of the easiest step of all. And that is budgeting.

I know, I know, everyone knows that budgets don’t work but I’m here to tell you that they do work, they can make your life simpler, and they can take you on the path to prosperity.

I have a business partnership with a new company called Keep2Budget. The software they provide is state-of-the-art, simple to use, and makes budgeting a commonsense and easy process. you can go to the website and have a look, but please come back to me as I may be able to offer a special deal on the price of the software.

Believe me, if more people took this first step and started a budget, the words bad credit would disappear from your vocabulary.

Bad Credit Loans

Over the last few months there has been a lot of talk in the newspapers about the sub prime crisis in the United States. What does this mean?

It is quite a complex story, but the bottom line is that many lenders in Australia will be affected and rates will go up. Although most if not all lenders will be affected in some small way, it is the non-bank lenders that will feel pressure the most. RAMS has already gone to the wall and have had their brand-name purchased by Westpac. This does not mean that existing borrowers it anyway under threat, it just means that RAMS, and lenders like it, had had their funding dried up, meaning they can no longer take on new lending.

The main area of lending that I think will be affected the most falls in the category of non-performing loans, or bad credit lending. These lenders obtained most if not all of their funding from the United States sub prime market. Until now, they have been a great resource of lending to people who will fall outside the normal lending criteria of mainstream banks. They give a second chance to people with credit problems or people who have had some problems in the past and have had their applications to client by the main lenders.

We have already witnessed one of the main non-conforming lenders in Australia, Pepper Home Loans, withdraw a number of products from the market, lower their racy oaths, and increase interest rates applicable to their loans. Existing borrowers are at the stage still safe, but the future is by no means clear.

The upshot at this quite early stage of developments is that nonconforming and bad credit loans will be under the hammer and will remove one of the key options available in the market. Although it is only a small percentage of the overall lending market, it takes a lot of potentially good borrowers, including a lot of self-employed people, out of the market completely. This may reduce competition for mainstream banks, that they themselves still have small exposure to borrowing in this market, in that they do obtain some of their funding from the sub prime lending market in the United States.

This will place it in the unusual position of having to consider a rise in interest rates even if the reserve bank does not raise them officially.

Home Loan Ebook Now Available

At last I have finished the first draft of the Home Loan Ebook I have been promising. To obtain it you just need to leave a comment requesting it and I’ll email it to you.

Feel free to make any comments as to how you think it might be improved, I am always keen to hear new ideas and to hear what things you need to know.

I will be updating it as the market changes so the information remains relevant.

Give it to your friends if you like but please note the copyright conditions and do not attempt to alter it in any way. (It’s password protected anyway!)

Naturally the information is not to be construed as advice in any way, and I do not hold the information to be definitive or complete. The information is a guide, hopefully a good one, that will assist you in determining which loan is the best for you, and not everyone else!

Email me or leave a comment below.

Cheers

Michael

Repair Your Credit Rating

St George Bank released the following information on a service that assists borrowers to repair their credit rating. If you need any further information please call me on

1300 133 193.

Borrowers can now repair their credit worthiness using an online service from a Sydney legal practice.

The service, which is available around the country from Credit Law Australia (CLA), allows people to have their credit bureau file reviewed and their case assessed for possible resolution with financiers

CLA Director, Stephen Tully, says the service was established with the sole purpose of assisting individuals and companies who have had their application for credit or finance declined.

“Some credit providers make errors when accessing or entering private credit information,” Tully says. “Many people are entitled to challenge these errors and improve their chances of securing a loan”.

For a set fee of $220, CLA’s legal team will assess a person’s file, advise them of any problems and provide a comprehensive credit assessment report. The report will advise of any legal avenues available to fix the file provide an estimate of CLA’s costs for doing so.

“The work involved in fixing a file is varied and differs on a case by case basis,” Tully says. “It may involve the removal of Court judgements or defaults and correcting errors and/or miscalculations. In some instances it is possible to explain to a lender why a client has had a poor file”.

Take for example a woman who was unable to get credit for over five years.She had one home loan and six personal loan applications rejected by various finance providers. when the final potential provider cited her bad credit report as the reason, the woman discovered that her mobile phone carrier had listed her as a bad credit risk.

Previously, the woman had got into arrears with her mobile phone account, but she had paid it off soon after. the default on the woman’s file was subsequently cleared.

CLA can provide people with a legal assessment on whether the difficulties they may experience when applying for finance are a result of past financial dealings and if there is any mechanism available to them to rectify problems.

I have come across a few cases recently where borrowers have had finance declined because of bad credit reports where the borrower had no knowledge of the problem. Once it became known however, we were able to get the decision reversed.

This service may make life a lot easier for many people who have “bad” credit reports through no fault of their own.