Why Bad Credit Doesn’t Have to Ruin Your Life

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Many people are frustrated because they have bad credit. The good news is that bad credit isn’t the end of the world. Your options are more limited when you have bad credit. However, it is still possible for you to get a loan, rent an apartment, finance a car, and even buy a house despite bad credit.

How to Get a Loan with Bad Credit

The honest truth is borrowing options are limited when your credit is bad. With that said, it’s not an impossible task. Several online lenders specialize in offering a loan when you have bad credit scores getting in the way. Another option would be to find a qualified cosigner.

It’s important to note that loans for those with less than perfect credit are going to have higher interest than if the person has good credit. In this sense, it’s imperative for those who borrow these types of loans to pay it back as fast as possible. Some lenders will work out an installment arrangement at the onset, so make sure to scrutinize the terms and conditions before signing, in order to understand them as best as possible.

How to Rent an Apartment With Bad Credit

Most landlords will check your credit. You will have an easier time renting an apartment with bad credit if you have a cosigner. A cosigner is someone who will be responsible for paying the rent if you cannot pay it. A cosigner will need to have good credit and a stable source of income.

You may also need to get letters of recommendations. You can get a letter of recommendation from your employer or previous landlord. The letter of recommendation should show that you are a responsible adult who can pay their bills on time.

Additionally, you should be prepared to pay extra. You will likely have to pay the first month’s rent and last month’s rent in addition to a security deposit.

How to Buy a Car with Bad Credit

Once again, the best way to get approved for financing is with a cosigner. Most auto dealerships will insist on going through their preferred bank for loans, and many will require the buyer to either have excellent credit or a cosigner. This is in addition to a down payment.

For those without access to a cosigner, bad credit car dealerships exist to serve your needs. Similar to personal loans for those with bad credit, car loans will have higher interest. It’s therefore wise to make as much of a down payment as possible on a vehicle.

Most important of all, however, is choosing a vehicle which is in good enough shape to make it beyond the length of the repayment schedule. Assuming the vehicle is used, the buyer must consider the reputation of the brand, the mileage, and other factors before making a final decision. Otherwise, you may find yourself underwater.

How to Buy a House With Bad Credit

If you want to buy a home with bad credit, then you will need to start saving up for a down payment. A larger down payment is required for people who have bad credit. A large down payment shows that you will be able to make the mortgage payments in the future.

You may also want to apply for a FHA loan, which is backed by the Federal Housing Administration. These types of loans have more lenient requirements. You will not only be able to get a loan with a lower credit score, but you will also be able to make a lower down payment. In fact, you may be able to get a loan with a down payment of 3.5 percent.

Ways to Improve Your Credit Score

Even though it is possible to get a personal loan, home or apartment with bad credit, it is best for you to work on your credit. You will need to make sure that all of the information on your credit report is correct. You will also need to pay your bills on time.

Additionally, you may want to get a secured credit card. If you have a secured credit card, then you will get a positive report every time that you pay on time.

A bad credit score does not have to ruin your life. You can still get an apartment, loan or credit card with bad credit. However, it is important for you to work on your credit so that you will have a better financial future.

 

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My Life, I Guess is a personal finance and lifestyle blog by Amanda, an older millennial from Ontario, Canada that strives to keep the "person" in personal finance by writing about money, mistakes, and making the most of whatever life throws at you.