by Dominic Ortiz | May 14, 2018 5:32 am
You might feel desperate about the fact that as much as you want to get a mortgage, you can’t because of your bad credit scores. This does not mean though you should give up on the idea of buying a house. You still deserve to get your dream house. It is just a matter of making use of the right resources at your disposal. Here are other things you need to do if you have a bad credit score and all your loan applications get rejected.
Look for alternative lenders
There are lenders out there that cater to people who have low credit scores. It might seem like a risk for them, but there are still a lot of them that are willing to specialise in this type of loan. You just have to be cautious though as a lot of people are taking advantage of those who are desperate to get loans. You can also partner with agencies like Mortgage Wise to help you in searching for alternative mortgages that would work for you.
Start paying your bills on time
Just because your credit score is currently low, it does not mean it will remain that way. There are things you can do in order to improve the score. This includes paying your bills on time. You should also consolidate all your loans so that it will be easier for you to pay them. It is also possible to get short-term loans that you are able to repay easily. Once paid, this could have a positive effect on your credit score.
Avoid pre-payment penalties
You might be easily tempted to get loans that come with pre-payment penalties. This is a clause in the contract that states the lender has the right to collect more money or get extra payments from you if you have paid early to reduce the total debt. This is such a waste of money.
Say no to loan sharks
You might easily fall for loan sharks since they won’t have a lot of requirements to offer you a loan. They will give you what you request in an instant. The only problem is that they have very high interest rates. They also have high penalties for those who are unable to pay on time. Therefore, you need to forget about this option and stick to traditional loans as much as possible.
Be willing to pay a higher down payment
There are companies that are willing to provide loans to people with poor credit scores provided that they are willing to pay a higher down payment. This gives the company the assurance that they already have money on hand just in case the borrower defaults. It is also a way of showing the creditor that you have enough money to feel confident paying a higher down payment.
There is hope even if you have a bad credit score.
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