Good Ezines

A lot of people have bad credit, but there are varying degrees of what is considered “bad credit.” If you’re not sure where you fall in the bad credit category, the first thing you should do if you need a loan for something like home repairs, or a car, or even a business loan, is to request a copy of your credit report. The law actually guarantees you an annual credit report for free from each of the three nationwide credit reporting companies; Experian, Equifax, and TransUnion.

Once you get your credit report, you will be able to see your credit accounts, accounts that have gone into collection, court records, and inquiries from lenders. Even if your credit report is less than stellar, you will have a better idea of how you appear to lenders and what kind of loan you should be looking for.

People who have a credit score below 640 will usually be considered sub-prime. According to the US Department of Treasury guidelines from 2001, “Sub-prime borrowers typically have weakened credit histories that include payment delinquencies and possibly more severe problems such as charge-offs, judgments, and bankruptcies. They may also display reduced repayment capacity as measured by credit scores, debt-to-income ratios, or other criteria that may encompass borrowers with incomplete credit histories.” This may sound familiar to you, but have no fear! There are lenders out there who specialize with these types of loans.

If you do fall into the sub-prime category, there are literally hundreds, if not thousands of websites that you can search on the internet for loans. You can search everything from personal loans to auto loans, depending on your needs. Most of these sites have free application processes. Once a person has submitted their information, the application usually gets forwarded to a lending institution where the application will be reviewed and then the applicant will be notified of their application status. In some cases, like with auto loans, the dealership will receive the application and contact the applicant directly to help them purchase a car by securing them a sub-prime loan. These dealerships usually have close relationships with lending institutions that specialize in sub-prime borrowing.

When you get approved for a loan despite having bad credit you can be sure of one thing; your interest rate will definitely be higher than someone with good credit. Because of your credit history, you are considered more of a risk as a borrower. But this is not the end of the world. In fact, as long as you have done the research and know what you can afford each month, getting approved for a loan, sub-prime or not, and being responsible about making timely payments is an excellent way to get your credit back on track.

Getting a loan with bad credit is not as hard as you may think. Some final tips to remember when applying for a loan, or after you get approved for a loan; be honest with what you can afford so you can pay it back quickly, review the terms of the loan so there are no surprises later on, make timely payments, and try to avoid paying just the minimum. If you can be responsible with your loan payments you can be sure that your credit score will not be considered sub-prime for long.

Dee Jurgens is the head copywriter for CyberLead, inc http://cyberleadinc.com specializing in auto sales leads http://www.carcredit.com delivering quality car loans for ten years http://myfreecreditscorenow.net Providing free credit scores for you and yours free credit score