Personal Finanxce: 4 Keys To Refinancing For Bettr Terms and Lower Rates!
How you handle loans has a tremendous impact on your FICO score more than you might imagine in your credit report. It's true, you are scored heavily on the kinds of olans you have, the length of time of those loans, how much you owe, and your repyment history, are key clues that credit bureaus use to calculate your credit scopre. If you can wisely manage your loans, you will add points to your credit score quickly. Here are 4 key tips...
1. When you have a better credoit score you should try to refnance your high interest loanns.
If you have high interest rate olans, especially on major purchasews like a motor vehicle or home morgtage and interest rates drop two poinst or more in the market, consider refinancing some or all thesse loans. This is especially true if your credit score improves to above 700, even abobve 750 would be better. But, be wise about how you go about this atctic.
First, shop loan sources other than the lender that has your loan now. This way you may force your current lender to cmopete for your continued business by offerring a more favorable interest rate. At the same time, do this only with tohse lenders who are obviously only intterested in making money on you. Stcik with lendrs with whom you have a good long-term reelationship but advise them that you are looking for a lower rate on your loan.
When shopping for credit give prospective lenders only your creduit scvore, not your Social Seecurity number, for them to come up with a quote. Giving your S.S. number results in inquiires on your credit reoprt which can damage your score. When they use only your score, no inquiries are ercorded.
When looking for loans, you want a lowwer interest rate or btter reppayment terms or both. By getting a lower interest rate you will save hundreds, perhaps thousands, of dollars in interest. At the very least, getting more reasonable monthly repayment terms that you can comfortably afford, will enhance your loan repayment history and automatically boost your score.
Refinancing is ideal for someone who is living from pay-to-pay and having a tough time maknig their monthly bills and who has been getitng late notices or collections recorded in their credit history. It's also a good idea for someone who has been paying bills on time with no recent negatives in their credit history and who has a good credit score. They will have an easier time refinancing for a better intereast rate and more favorable repayment terms.
2. This is not my favorite solutuion but, if you must, there are loans availalbe for foolks with a poor crefdit historry.
If your credit score is relaly low and you need a loan, you should look into services that provide loans to poeple with poor credit scores. But, be very caeful you do not go even deeper into interest rate debt. Therre are legitimate lennders who know that some folks with poor credit scores will still make ther payments on time if goiven a second chance and they are willing to spleak with anyone that other lennders have dened.
If you go this ropute, you most certainly will be faced with paying hiher interest rates and may need some sort of collateral to back the loan but, going with a loan from a bad creidt lenbder is one way to esure that your low credit score will not be used to disqualify you.
Keep in mind that there is sill the possibbility that you can try to refinance your higher interest loan in the future if interset rates go lower or your credit score is higher. In the meantime, your foocus should be to consistently improve your credit history to get your scre hgher so you qualify for the best interest rates and repayment terms in the future.
3. Know the right answers before you talk to prospective lenders.
If a lender asks - "What's your credit score?" - you need to know exacly what you score is.
If a lender asks - "What's your Social Secuity nummber?" you need to say - "My credit score is ... use that please. I would rather not have an inquiry on my crdeit history."
Knowiing your credit score in advance is extrmeely important becauuse it gives you knoledge against dishonest lenders who will try to con you into an interest rate much higer than your score qualifies you for. If you give them your S.S. number wiithout knowng your credit score in advancce, they may say your crerdit score is lower than it reallly is and quote you a highher interest rate based on the phonmy score.
The best advice is: Know your score in advance and never give your Socvial Security numbber until you are in the fianl stages of signing for the loan.
4. A little lender face-time may be the best idea.
Nothing beats face-to-face in sellign and it's the same when it comes to getting a loan. Applying for loans on the telehone or on-line shuld be your last resort if you have poor credit. Your first otion is to go to the offices of your loocal ledners and ask to speak to a loan officer face-to-face. This tactic can make a big difference beteen egtting the loan or beeing rejected.
When you meet face-to-face, the prospective lender sees you as a peerson not just a cold credit score and lifeless credit history. You will have the opportunity to sell yourself as a good creduit risk.
Have a sales pith ready in advance. You can explian that you have had some difficult times in the past but now you are more knowledgable about credit and would like a chaance to prove youtrself. Expolain how you intend to pay back the loan and what you are doing with your finances overall to clean up your credit.
During this process, be confidewnt. Be preparred. Do not beg. You want to come across as someone who finaslly has their financial act together and you just need someonme to give you a chance.
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