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The psychological distress of a loan rejection

Bad Credit Advice — Wed, 05 Jan 2011 21:32:05 +0000

In many instances a loan application rejection might cause the applicant excessive stress and uncertainty. Possibly this rejection is based on the fact that the applicant has received bad credit score and the bank is not willing to risk loaning its funds to a customer that will not be able to repay back.
Therefore in goes without saying that the banks will be applying excessive evaluation to any application especially if it concerns a new customer or a customer with high possibilities of seeking bad credit loans. This is especially true today that the banks are struggling to survive and a potential bad debtor will add to the already bad financial situation that banks worldwide are experiencing at this moment.
However, what about the applicants who get rejected? Especially if these people have done their plans to improve their personal lives though better education or a better home or even something else.
These people are possibly experiencing excessive personal distress which might lead them to actions that would cause them additional personal problems. The psychology of these people could be a whole new theme of a scientific study. This research could set the grounds for a better understanding of the psychology of the people who receive a loan rejection. This study could be of great use from the governments’ administration in many levels.
Additionally this research could be of great use for the banks and other financial institutions. The reason for this is that it might prove that if some of the loans were actually given instead of rejected it could have an additional positive result for the macroeconomic growth of a state.
The importance however should be placed in the personal psychological health of the potential customers and especially the customers that might receive a loan rejection as this could act as a cautionary measure for additional costs in time and money.

Alternatives to Filing for Bankruptcy in Dayton Ohio

Bad Credit Advice — Thu, 11 Nov 2010 21:19:06 +0000

There seems to be a trend in our country where the first thing someone does whenever they get into bad financial straits is to immediately consider bankruptcy. And while bankruptcy can be a viable means to eliminated overwhelming debt (and as a side note, you should use Dayton Ohio Attorneys if you do go this route), there are other alternatives to filing for bankruptcy. As such, we will discuss a few of them below.

First, you can always try to renegotiate with your creditors. Keep in mind, if you do file for bankruptcy, there is a hierarchy that determines who gets paid first. More often than not, unsecured creditors are usually the last ones to get paid. Given the choice of receiving their money back (without interest) or getting pennies on the dollars, most unsecured creditors will happily negotiate with you.

Second, you can always seek out a consolidation loan to reduce your debts. With a consolidation loan, you combine all of your debts into one payment with a lower interest rate. As a word of caution: if you do this, you must never, ever borrow any more money while paying off the consolidation loan. If you do borrow money, you will dig a hole that is almost impossible to get out of without filing for bankruptcy.

The last alternative to avoiding bankruptcy is to reprioritize your life. If you cut your living expenses to the bare minimum, it may be possible to use the extra money saved to eliminate your debt.

While none of these alternatives may seem pleasant, they are far easier than going through the bankruptcy process (which can damage your credit record for seven to ten years). If you find that you have no alternative but to file for bankruptcy, we recommend you contact a Dayton Ohio Bankruptcy Lawyer.

Improving Your Credit Score For Dummies

Bad Credit Advice — Mon, 24 May 2010 18:48:03 +0000

A lot of people are asking “how do I improve my credit score?” Credit is something that we cannot live without and with the low credit or you will have problems obtaining things in life. Your credit score will determine whether or not you will get the potential job that you have been searching for or what interest you will be charged for the new home that you are about to purchase. Let us look at some of the different ways to help improve your FICA score.

One of the hottest things that an individual can do is to pay very close attention as to what the balance is on their accounts are. You do not want your balances to be more than 50 percent of what the credit limit is. When you allow your balances to go up to high, creditors will see you as a risk and that is the very last thing that you want to happen.

It is crucial that you make all payments on time. Having late payments will cause your credit score to drop in this will hurt you when you go out to apply for future credit. You will want to make sure to make all payments on our before your actual due date. You will also want to be sure to do pay at least a minimum payment. One thing to remember about a credit card is after due date generally will stay the same; therefore you can plan accordingly each month when doing your budget.

Be sure to keep the same accounts and not go out and constantly acquire new accounts. The longer you have your accounts; you will be showing that you are more stable with credit. This will definitely help you have a higher score on your credit report.

Make it a priority will to focus on your credit. Devising a plan to get things paid off and increasing your credit score will help you in the long run. Raising your credit score will help you to obtain things more easily in the future.

How Does Credit Consolidation Work?

Bad Credit Advice — Sat, 01 May 2010 18:09:51 +0000

No matter whether you have a high credit score or low credit score individuals can raise credit scores by starting a credit consolidation program. Often, services are advertised by businesses who offer to do it for the creditor. However the steps are fairly simple and individuals can do their own credit consolidation program if they choose. Here are some steps to get started consolidating credit on your own.

First, get a copy of your credit report. This will give you an idea of how many credit cards you have outstanding, as well as their balances. Try not to have too many cards and available credit open to you because this can actually harm your credit score. Consolidating credit simply means that you decide to improve your score by getting rid of some credit cards and moving the balances to others. This way you consolidate your balances on fewer cards and that helps improve your score. This can help borrowers regardless of their current credit standing.

Another way to consolidate credit is to get a new loan for the purpose of paying down credit cards. Often what a creditor can do is borrow the money to pay off credit card balances and other outstanding loans, and consolidate all of the debt into a single personal loan. These can be dangerous however because often people don’t close the credit cards they’ve paid off, and simply start fresh with zero credit card balances which they promptly charge back up to the limit. But now they have an additional loan on top of that debt. This can cause serious problems if you’re unable to pay these balances.

If you decide to take out a credit consolidation loan, make sure that you actually use it to close off some debt and raise credit score, as well as being able to pay the new monthly payments. In addition, be sure you don’t take out a credit consolidation loan that has a higher interest rate than you’re already paying on the existing debt. Your overall interest payments could go up, and that’s the exact opposite of the direction you want to go.

By reducing the number of credit cards or the total available credit that you have, this is how credit consolidation can help you improve your credit scores. Be sure to take this step knowing it will improve your overall financial standing, and avoid the impulse to use it just to get extra debt you don’t need.

If you have bad debt and cannot get a credit consolidation loan, you can still consolidate your credit by simply paying off certain cards. One of the fastest ways to do this is to start with the card that has the lowest balance. For example if you have a card with just a couple hundred dollars on it, do whatever you need to do to get some extra cash and pay down that balance. Once you have paid off the balance of your lowest creditcard, close the account. Congratulations, you have just consolidatd your own credit. Your credit report will begin to show improved credit scores because you have reduced the credit available to you and paid off some of your debt as agreed. Taking steps like this will, over time, improve the scores on your credit report.

Will a Debt Management Plan Affect My Credit Score as Much as Bankruptcy?

admin — Fri, 24 Jul 2009 03:08:30 +0000

No, because with a debt management plan you’re showing a good faith effort to repay the debt through voluntarily seeking credit counseling and setting up a budget for repayment of the entire balance due.

Under bankruptcy you are either wiping out the debt entirely or setting up a payment plan to pay less than the balance owed.

Your credit report may contain a notation that a certain account is under such a plan, but if you come to an agreement with a creditor and then hold up your end of the bargain, your credit scores may not suffer.

How much a debt management plan affects your credit score will depend upon whether your lender marks your account as late. In some cases that will not be because the lender is unwilling to work with you, but because he is unable to alter the way his billing and reporting system is set up.

For instance, your lender may agree to a reduced interest rate or reduced payment amount, but if the software he uses won’t allow the change, it might automatically report your payments as insufficient.

Another occurrence that could hurt your credit scores is getting involved with the wrong credit counseling agency.
While you make payments to the agency to disperse, not all agencies send out payments on time. Every late payment will appear on your credit report and will lower your scores.

Be aware that the best, most reputable credit counseling agencies are free. They will help you explore your options and decide if a Debt Management Plan is right for you, or if bankruptcy is the only answer. If you do choose bankruptcy, then you’ll also need a qualified bankruptcy attorney.

Bankruptcy will remain on your credit report for 7 to 10 years, depending upon which type of filing you qualify for.
By contrast, a Debt Management Plan will be erased from your credit report as soon as you have things under control and exit the plan. Even if you’ve posted some late payments as a result of the bookkeeping glitches we mentioned, those fade over time and lose significance when followed by on-time payments.

This alone could be a deciding factor if you plan to buy a home any time within the next 7 years. Having the bankruptcy on your report will keep your scores low and could cause you to pay as much as a couple percentage points more in interest, if you can even get a loan.

In today’s tight mortgage market, only those with the best scores are qualifying, so it is in your best interests to make decisions now that will affect your credit report and credit scores most favorably over time.

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http://www.creditscorecowboy.com is the #1 source on the planet for a free credit report, identity theft software and a blog with a wealth of information writtten by lending professionals that know about credit and what determines ones creditworthiness.

6 Things To End Credit Debt!!

admin — Thu, 23 Jul 2009 12:41:57 +0000

In order to end credit debt it takes action on your part. So whether or not you are being swallowed by the sink hole of credit card debt or you are just starting out to dig yourself into credit card debt – you have to take action before it’s too late in order to be come debt free.

The six tips listed below can help you get out of credit card debt…if you use them.

1. Stop using your credit cards – By using your credit cards you are paying additional interest on the credit card balance you owe on which you’ve already been charged interest. Unless you pay the new charges when you are billed you are accumulating additional interest on both present and past charges.

2. Figure out how much credit card debt is costing you. How you may ask! You can determine how much credit card debt is costing you by seeing how much interest rate you have to pay. This is done by reading the fine print on your latest credit card statement. If you do not understand then you call your credit card company and have them explain it to you. By law they have to explain it to you.

3. Lower that interest rate!!!! Lowering your interest rate is the most effective and easiest way to get your credit card debt problem under control. You can lower the interest rate you are paying by transferring high interest rate amount balances to lower or no interest credit cards.

4. Call your credit card companies and tell them to lower your interest rates. Since you already know the interest rates it is time for you to ask your banks and credit card companies to lower the interest rates. You should call them and ask to speak with a supervisor. The supervisor has the authority to give you a lower interest rate. (Don’t take no for an answer)

This is what you tell them: The rates are too high and you want it lowered. And also let them know that if they are not willing to lower your interest rate you are considering to close your account and transfer all your credit card balances to the company that is willing to give you the lowest interest rate. (since they don’t want to loose the future profits from you they may lower your rate in order to keep your business.)

5. Consolidate your credit card debts – transferring all credit card balances to one credit card – is an effective way of getting out of credit card debts. So when negotiating to get a lower interest rate you should let it be known that your ultimate goal is to get out of credit card debt at the lowest possible cost and not credit card shuffling.

6. Cut your savings in half. It would be foolish to be paying high interest rates while continuing to save the usual amount, if you are indeed saving. Once you have removed the credit debt you can actually increase your savings by adding the former “credit payment” to your savings account. (You will be amazed at how much it will grow your savings.

It works like this. Get all your credit card balances. Divide each balance by the minimum amount you are required to pay each month. This tells you how long it would take to pay off each balance. Start by paying off the one that takes the least amount of time (half your savings + minimum payment). Continue making minimum payments on the rest. When that least payment is finished you would pay the next least payment and so on. You would continue using this tactics until you are no longer in debt.

If you follow the above tips and tactics you should be on your way to getting out credit card debts in very short order.

by Doc Schmyz

About the Author:

Doc Schmyz has worked with investors all over the US. He built a free website shares Real estate investing information for all over the US. Find Real estate investing information by state

Fixing Bad Credit

admin — Thu, 23 Jul 2009 00:58:04 +0000

With the state of the economy being what it is, many Canadians are finding themselves in bad credit situations.
Credit can seem like a never-ending downward spiral, but you can fix your credit on your own with a bit of know-how.

Quick Credit Fix

There’s really no such thing as a quick credit fix.
Unfortunately, credit takes months, sometimes years, to repair. Still, there’s no need to panic when it comes to your credit. Instead, take a deep breath and try to follow these simple steps:

- Make payments on time: try and pay all bills, credit cards, and other payments on time every month.

- Avoid overdrafts: bank overdrafts can really impact your credit. If you don’t have a bank account that includes overdraft protection, it might be time to switch banks.

- Be consistent: keep making payments on time for the next two years. The more consistent you are, the better off your credit report will be.

- Prove that you can handle loans: take out a loan that you can handle, and make sure to pay it off on time. This will really help your credit to improve.

Why Loans Help

The main reason why bad credit happens is that most people borrow more money than they can actually afford to borrow.
When this happens, payments are missed. When payments are missed, credit ratings drop drastically.

If you presently have bad credit, taking out a new loan might not seem too wise. However, this is actually a great way to improve your credit score. You see, if you can prove to credit rating companies that you can handle a loan, then your score will improve.

Simple Loans

Those people with bad credit aren’t likely to be approved for a bank loan. The good news is that you don’t need a bank loan to prove that you can handle a loan. Instead, look for a private lender that will grant you a loan based upon collateral. If you own a car, a car title loan may be the solution.

Car title loans are one of the simplest loans to obtain. If you own your own car, then you can use your car as collateral in order to obtain a loan. By paying back a car title loan on time, you will prove to credit rating companies that you can effectively pay off a loan. In turn, this will help your credit rating to improve.

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For more information about car title loans, please visit our website at http://www.bhmfinanicial.com . While you’re there register to receive financial updates at our blog http://www.bhmfinancial.com/wordpress/ .

Credit Repair Help – Here’s How To Start Right Now!

admin — Wed, 22 Jul 2009 19:13:20 +0000

It’s hard to live with bad credit. You need credit to lease a house or car. Most loans you apply for will be turned down with bad credit. It can be frustrating to have bad credit. You need credit repair help.

It’s not that hard to get your credit repaired. All it takes is a little time and a little effort on your part. You must be diligent with your spending and take a few simple steps. Repairing your credit will not happen overnight.

First thing to do, must do is create a budget. This will allow you to know how much money each month you can spend on your debts. It’s best if you document for one month your spending habits. You never know how much you spend eating out and buying fancy coffees.

Equifax, Experian, and Trans Union are the three credit reporting agencies that report to FICO. FICO is who keeps your credit score and reports it to the banks. You should get a credit report from all three agencies. Your bank will give you a free report every year if you ask for one; otherwise you can find an online solution.

Contacting the creditors is the next step. You need to speak to them to offer a payment plan. They will be willing to work with you because they want the money owed to them. If you offer to pay off the full balance and settle right then and there, usually they will give you a discount and ask you only pay the principal. Any agreements should be mailed to you in writing.

Now you need to close out and pay your credit card debts. Destroy the cards and start paying them off. The best idea is to close all the accounts you have except your three oldest ones. You see, credit scores are based on the account history as well as other factors. Even if these lines of credit are opened, you don’t need to use them unless it’s an emergency.

It seems simple, but pay the bills on time. This will be the best thing for your credit. The collections and creditors are willing to work with you and understand the situations you may be in. Any payment for the month is good, if you cant afford your full payment, you can still give them a good faith payment of as much as you can afford. This will at least show you attempting to work with the creditors.

by Mark Alison

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Addressing A Negative Credit Score

admin — Mon, 20 Jul 2009 00:27:59 +0000

Credit repair is a hot topic these days. As more and more people understand that they cannot pay their bills, our national credit average is dwindling. However, there are some risks to using credit repair companies to fix a negative credit score that you should know.

Your credit score is the faced the companies put on you. You can’t get out of it that you can change it. The first step is to determine your credit score and decide if changes need to be made.

There are different types of credit that are applied to the credit report. For example, a mortgage or automobile loan appears less risky than a credit card. You want to manage your credit portfolio in such a way that you appear with an optimal amount of risk for credit companies.

If you want to repair your credit, it’s time to learn personal discipline. Taking steps to reduce your expenditures will help you prepare your credit. Learn these techniques now and use them religiously.

Negotiations with credit companies for the purpose of credit repair can sometimes be difficult. The point is to remember that you have legal rights. If you need help dealing with uncooperative companies, you should seek recourse if possible.

The easiest way to help out your credit report initially is to stop applying for credit. If you’re thinking about applying for more credit cards or loans, cancel it. Allow some time to pass between credit applications to reduce adverse affects.

A credit freeze may be beneficial to protect you in case of identity theft. However, it places a big inconvenience on you if you use this credit repair technique. A credit freeze eliminates the ability of creditors to review your report.

Your credit score is comprised of many different factors. Not every factor carries the same weight in determining your credit. If you’re attempting credit repair, it is in your best interest to pursue those activities which give you the best leverage.

Basically, credit companies use the credit report to determine the amount of risk there is involved with lending you money. If you are trying to get money from several different sources in a short period of time, you are risky. This desperation is evident by many recent credit reviews on your credit report.

You are ultimately responsible for all credit that you have. You are also ultimately responsible for repairing your credit. Unless you can change your behavior to reflect responsible credit use, you will be in this situation over and over again.

In conclusion, the loss of credit has made some people desperate to increase their credit score. However, step back and take a look at what you’re doing. Maybe you should take this opportunity to rebuild your credit rather than try to find a quick fix solution.

by Mabel Cooper

About the Author:

This trust stems from your ability to handle a reasonable number of accounts. Running A Credit Check If you need to keep one credit card for emergencies, keep it out of sight and out of mind. If you want to start a credit repair process, the first thing you should do is find your credit report.

Understanding Credit Cards Impact On Your Credit Report

admin — Sun, 12 Jul 2009 12:02:27 +0000

In this day in age, credit cards are extremely important and popular. It is estimated that millions of people carry at least one credit card, this does not account for people who carry two or more. Credit cards are readily available, they are available to people with good credit and even people with bad credit. However, the one thing for any credit card holder to remember is that they tend to have a great impact, good or bad, on a person’s credit report.

Your credit report is not only important to creditors, but it should also be important to you as well. This report is used by creditors, such as lenders and bankers, when determining if you are credit worthy for a loan or credit card with their company.

In fact, the credit report is the most important aspect of this process that it can literally make or break the decision. Credit cards are the number one reason why so many people suffer from ugly credit reports and it is important to take steps to avoid these ugly instances.

For the most part, people are responsible with their use of credit cards and do not allow them to get out of control. This allows them to show credit worthiness to creditors and lenders, which allows them to gain more credit and more loans. However, too many accounts open at once could damage your credit without you even knowing it. In fact, if you have too many accounts open at the same time, creditors will be less likely to extend you more credit, with fear that you are over extending yourself and will run into a bad situation when it comes to payment time.

Many people have two or more credit cards and in some cases, this can actually hurt their credit instead of helping. Several credit cards will signify to a lender that you are over extending yourself, giving yourself too much leeway. It is the job of any lender to look at all risks, this includes a scenario where the worst possible event could happen. It is important to understand that your credit report is the pulse of your life.

The information contained on the credit report can literally make or break you. It can decide if you get any credit cards, loans, credit of any type, jobs, or even a place to live. When you have credit cards, remember the impact it has on the credit reports and make sure you use them responsibly. Do not miss payments, do not make late payments, and keep the balance as low as humanly possible.

Missed or late payments can quickly damage your credit report, even if it is just one. This typically is noted on the credit report and other potential lenders will see this. If it becomes a habit, your credit rating will plummet and the negative impact will become noticeable.

Be responsible and safe with credit card use. Make sure you carry not more than one to two cards at any time and keep an eye on their usage. Make your payments on time and you will find your credit report stays safe and sound.

Nick Makaryk is an Internet Publisher, Copywriter, and Founder of Best Credit Cards . A Free consumer credit card comparison site helps you find the Best Credit Card while avoiding high interest rates, charges, and fees.

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