When you apply for a mortgage, a lender will look at various details, including your income, your employment history, your credit history, your ability to make a down payment, and more. Even for people with an acceptable credit rating, this process is hard and stressful.
If, however, you have bad credit or no credit at all, it will be very difficult for you to be accepted for a loan. Luckily, there are things you can do to make yourself more interesting as a potential borrower.
Steps to Build or Rebuild Your Credit Rating Quickly
- Apply for a secure credit card. This type of credit card actually doesn’t borrow you any money as such. Rather, you put money on the card, which you can then spend. After a while, the secure card becomes a true credit card, which means you will be able to charge things against money that isn’t actually yours. You do, however, have to be committed to making regular payments on time at all times.
- Department store cards. These tend to be a bit easier to be accepted for than credit cards. This is because they have a fixed – and very high – interest rate regardless of your personal credit rating. If you always pay your balance, then it will look good on your credit file. Having a store card with at least a small charge on it is also a positive way to rebuild or build your credit.
- Authorized user cards. This is a rare construction in which you need to find someone who truly trusts you. Essentially, that person has a credit card and is solely responsible for the payments thereof. However, they authorize you to also use the credit card. It is rare for this construction to be accepted, because the chance of abuse is so high. However, if you are desperate to do something about your credit, then this can be a very good option.
- Payday advance loans. These loans essentially borrow you money secured against your next paycheck. If you are looking for payday advance loans online, you may come across some negative stories about their construction. It is certainly true that some of these loans have landed people into a negative cycle of debt. However, if you are only applying for these to build up your credit, and you are therefore only applying for small amounts and always paying back on time, then there really is no danger.
As you can see, building or rebuilding credit can be very hard work. However, if you want to have a secure financial future that involves things like mortgages and more, then you will have to bite through these difficult times. What is also very important is that you know there is light at the end of the tunnel. Whether you don’t have any credit yet, or whether you have terrible credit because of difficult past financial situations, solutions exist. All you need to do is find the one that works best for you.