How to Get a Loan with Bad Credit

Mortgage Loan Process

If this is not an emergency, the first step to get a loan with a bad credit is to improve your credit score so you can comfortably afford the loan you need.

Start by making on-time payments, especially on credit cards; and reduce the balance on cards to under 30% of the credit limit allowed. Finally, don’t apply for any new credit.

The combination of those three factors – on-time payment; low credit utilization; no new credit applications – account for 75% of your credit score. It’s not unrealistic to think that making an effort on those three fronts could raise your score by 100 points in as little as 3-6 months.

If, however, this is an emergency and your application for a loan has been turned down repeatedly due to poor credit or no credit, it might help to ask a bank or credit union loan officer for an in-person interview to convince them you are creditworthy.

If you get that interview, be sure you are prepared with documents that prove you’re a good risk. Lending institutions love stability. If you can show them that you’ve lived in the same house (or city) and worked the same job (preferably for the same employer) for several years, it definitely helps your case.

Common things to bring that prove your credit worthiness include:

• Tax returns, W-2s and 1099 forms from at least the last two years
• Details of your job history, including salary and pay stubs
• List of assets such as home, car, property and where you stand on paying them off
• List of unsecured debts such as credit cards and medical bills
• Whether you pay or receive alimony or child support
• Bank statements for checking, savings and CDs

Not all of these documents are required, but if you have a poor credit history, anything you can produce that demonstrates you have become responsible with your money will be considered a plus. You should also expect the lender to ask questions about your credit history that may reflect negatively on you. Things like:

• Have you been involved in any lawsuits?
• Do you have any judgments against your or items in collection?
• Have you declared bankruptcy or had a foreclosure judgment against you?
• What is your ethnic background?

The last question would seem to violate anti-discrimination laws, but it is required by the government so that it can keep data on lending to minorities and make sure they aren’t routinely turned down or charged excessive fees.

The purpose of an in-person interview is to convince the lender that if you receive a loan, you can comfortably make payments. Any evidence you have that can support that fact – especially proof that you paid off loans on assets like a car, motorcycle or boat in the past – are going to work in your favor.

Source: debt

Financial Capital Group, LLC is a lender that provides home and commercial finance solutions for business, professionals, individuals and families since 1999. Our love and care for others is directed as much within our walls as it is outside of them. Our desire is to work together to meet the needs of our customers.

Mortgage Loan Process.

Houston Mortgage Company, Houston Residential Mortgage, Commercial Mortgage, Construction Mortgage, Industrial Mortgage, Land Mortgage, Refinance Mortgage, Mortgage, Conventional Mortgage, Mortgage Insurance, Private Mortgage Insurance, Mortgage Options, Mortgage Programs, Mortgage Rates, Mortgage Professional, Mortgage Calculator, Mortgage Application, Mortgage Process, Mortgage Loan Process, Loan Options, Loan Company, Conventional Loans, Personal Loan Insurance, Loan Options, Loan Programs, Loan Professional, Loan Estimate, Loan Calculator, Loan Application, Financial Capital Group