Bad Credit Car Loans | WA Auto Credit

When it comes to applying for a home loan to buy a home, lenders are on the lookout for specific criteria. While applying and qualifying for a home loan is not an insurmountable task, it is important that you rate high in many of the key areas or you are not likely to be approved. Let us take a look at these essential areas.

Job Stability

Lenders like to approve individuals who have held the same job for at least two years if not longer. Jumping from job to job or having holes in your job history will require explanation and is not advantageous in the eyes of a lender.

Owning a Business

If you own a business you must provide a solid history of the success of your business for a two year period. To do this you must either obtain a letter from your accountant that clearly states that you have been in business for a period of two years or else you must be able to show proof of a business license that will identify when your business got its start.

Two Year History

If you do not have a two year job history or have not been in business for two years then you can still apply for a home loan. If you qualify in the other categories then you are not likely to run into a problem with being approved. For those who fail to meet the two year criteria there are what is known as “No Doc” loans. If you apply for one of these types of loans, your job history does not have to be disclosed or verified. The down side however is that you will pay a higher interest rate on the home loan.

Income

The two year rule applies with income as it does with job history. The lender will need to see two years worth of W-2 forms as well as your current pay stubs. If you own a business, the lender will take a two year average of the money you have earned based on what shows on the last line of your tax return after everything else has been written off. If you earn a commission income you must be able to account for a two year history and from that the lender will take an average. If your monthly debts equal 41% or less of your gross monthly income then you should be approved for a home loan.

Down Payment

The traditional amount required for a home loan is 20% which will put you in good standing with the lender and help you get the best interest rates possible. However putting 5% or 10% down is still something a lender will be pleased to see.

Reserves

Reserves are money that remains in your bank account after you have paid all of your closing costs. Having one month of reserves looks well to a lender and that includes enough money to cover one home loan payment, your property insurance and all applicable taxes. The reserves you need are dependent upon the type of home loan you are applying for. As a general rule, having two to six months worth of reserves is considered desirable.

Credit History

Your credit history plays a significant role in whether or not you will be approved for a home loan and well as what terms will be set down. It is your “fico” score that will be closely scrutinized by the lender and will weigh heavily into the decision of whether to approve your application or not.

If you happen to be in debt then the likelihood is that you consider ‘credit card’ to be dirty words! Credit cards account for the majority of debt in this country at the moment, but did you know they can also help to get you out of debt?

The latest credit card trend is towards balance transfers. Transferring your credit card balances from a high interest card to one of the many interest free credit cards that have fixed nine, twelve or eighteen month offers can knock hundreds of dollars off your bills and give you a little breathing space to get your credit card balances cleared. But if you are not sure where to look for help, then a website like Credit.com can help.

About your money is a comparison site that has access to plenty of the latest interest free credit cards and the related offers. The site is really comprehensive, complete with a comparison table and a guide to help you choose the interest free credit cards that will best suit you. If your debt is more extensive though, you might want to take a look at the personal loans section instead.

Now is the time though. With 2009 approaching, think about a fresh start. Now is the time to look to clear your debt.

In the following article I will explain how credit report inquiries can sometimes lower your credit score, even if only slightly. Depending on the type of inquiry, your score can lower 0 - 10 points -even more with multiple inquiries. While this should not be a major credit worry, it is helpful information to keep in mind.

What is a credit inquiry?

As the name suggests, a credit inquiry is the nomenclature used when anyone pulls your credit report for review. There are two main types of inquiries: inquiries that are only seen by you, and inquiries that are seen by everyone who reviews your credit report. Only the latter affects your credit score.

While multiple inquiries make a bigger impact on your credit score, multiple inquiries of the same type (auto, mortgage, credit card, etc.) within the same 2-week period are usually only counted as one inquiry. The credit bureaus started doing this after customers started to complain that their scores were dropping 20 - 30 points in one weekend of car shopping (often when you are seeking financing for a new car, dealerships will make 20+ inquiries).

This brings forth an important tip: when you are seeking credit (filling out credit card applications, for example), do it in “bursts”. If you are going to apply for 5 credit cards, minimize the credit score impact by doing it all on the same day and then waiting a couple of months (if you have no success the first time) to do it again. Multiple credit inquiries indicates to credit bureaus that you are desperately in need of credit because you cannot honor your current obligations. This is why they lower your score.

Types of inquiries that do not affect your score

1. Pulling your own credit report is not seen by anyone but you.
2. Inquiries for pre-approval offers such as those “You’ve been pre-approved!” letters you get in the mail.
3. SOME credit inquiries made by debt collectors.

Types of inquiries that do affect your score

1. Inquiries made by creditors when you apply for credit.
2. Inquiries made by cell phone companies when you apply for a cellphone.
3. Car dealerships inquiries.
4. Other misc. credit applications (such as a home loan).

We did not list every type of inquiry that can affect your credit score. Hopefully this gives you a slightly better idea as to how credit inquiries can affect your score.

There is a first for everything, and I have now seen my first bankruptcy due to gas prices going up. Here was the situation:

Our client (we’ll call him Ricky) has had the same job for several years. Ricky’s income has stayed roughly the same for the last few years, while gas prices continued to rise. Ricky has a 45-minute to 1-hour commute each way and always put his gas charges on his credit cards. Over the course of several years the credit card balances steadily increased (with gas prices) and all of a sudden, he could not afford the minimum payments on his cards anymore. Then he noticed the total balance of the credit cards…roughly $50,000.

This was not one of those unpredictable life moments that changes everything for you, your finances, and your credit. Ricky could have seen this coming, and could have done something about it. He chose not to because he could always make his minimum payment. He did not want to move, he did not want to get a car with better gas mileage (he liked his SUV), and he did not want to find a job closer to his house.

In the end, we were still able to help Ricky get a new car (which got much better gas mileage) and start re-building his credit after his bankruptcy. He has referred a couple of his friends to us because he liked how we were able to help him buy a car and not make him feel bad about his poor decision making in the past. If you, or someone you know is in a similar situation, contact Washington Auto Credit so we can help you go over your options.

Most Americans are fond of overspending. People buy things they do not really need. Once they see some thing that catches their eye, they buy it - often without even thinking of how they will pay for it.

People usually do this due to lack of will power or budgeting. And lots of them use their credit cards as a reserve once they run out of cash. They tend to spend a large amount of money in order to “keep up with the Jones’” or to make them feel better about themselves. Unfortunately, this never really works, and it causes a lot of damage in the long run.

Almost everybody has a credit bureau, maintained by a credit reporting agency. Many people have bad credit items on their bureaus, such as defaults, charge-offs, repossession, and slow payment history. This means that when these people apply for loans, mortgages, or credit cards, car loans or even for a simple bank account, they may be turned down.

Sometimes these people are not even aware of the negative information on their credit bureau. When this is not corrected, it causes them to have a bad credit.

Having bad credit can adversely affect virtually every aspect of your life. A low credit score means severe financial limitations and difficulties. As if this is not enough, there are hundreds, maybe even thousands of debt relief, debt consolidation, debt management, and consumer credit counseling companies that promise to “cut your payments in half”, “save you thousands”, or our personal favorite - “get you out of debt with the click of a mouse”.

If only your computer had the debt relief magic that all of those bad credit spam emails promise. Although getting out of debt cannot be done with a click of a mouse button, it is probably not as difficult as you think.

If you are in this kind of predicament, it is imperative for your financial stability that you do everything you can to repair your credit.

What is bad credit repair?

“Bad Credit repair” is a common term often used to describe a systematic process of rehabilitating an individual’s creditworthiness, financial credit reputation, or just raising your credit score.

You can try to repair bad credit yourself, and sometimes the steps are simple. However many people find credit repair a difficult and discouraging process.

You start by obtaining copies of your credit report, reviewing the credit report for errors, omissions, and misleading information, and requesting corrections to such information by means of a formal dispute. Often times, it can be beneficial to dispute every negative item on your credit, even if it is true. Not all of the correct negative items are always confirmed.

If you are worrying too much about your credit, conquer that feeling! No matter how bad your credit is, you can take the following steps to make it better:

1. Pay all of your bills on time. Decide if you have the income to meet all of your obligations. Remember, late payments (payments that are 30 days late or more) have a negative effect on your credit rating.

2. Reduce the number of credit cards that you have. This will reduce the tendency to overspend. Contact your creditors about your plan and perhaps close some of your newer accounts. Keep your older credit cards, and pay them off. It helps your credit to have very old accounts that are still active.

3. Avoid bankruptcy. Bankruptcies are not the end of the world but it will be with you for years. It will stay in your credit report for up to 10-years and hamper your ability to get credit in the future.

4. Request in writing that your creditors reduce the interest rates on your accounts to lower the amount of your monthly budget that goes to just interest.

5. Monitor results and stick to your plan. Review your file every few months to make sure that any errors that you have disputed have been corrected. After a period of time inquiries will not count against you provided you have not been applying for credit.

These steps can help anywone with bad credit. If you are in that situation, do not waste energy stressing about it. Bad credit can almost always be improved or corrected.

* Avoid Overspending

* Establish a Realistic Budget

* Build a Financial Cushion

* Read and Understand Your Credit Report

* Get Mistakes on Your Credit Report Fixed

* Get Positive Information Added to Your Credit Report

* Negotiate with Creditors

*Set Up Your Plan and Start Now!

Some people think of a Bankruptcy as a last resort. I talk to customers all the time who are a few months behind on every bill they have (including their mortgage or rent) and still want to try to buy a car. It baffles my mind that someone can think that it might be a good time to get a loan that will have a $300-400/month payment when they have not paid the $25 minimum payment on their credit cards for 3 months. Better still, trying to trade in a car (that you owe money on) when you are so past due, the bank has let you know that the repo man is coming.

If you have found yourself in a situation like this, or if you simply have so much debt that you do not know where to start. You might consider talking to a professional about your bankruptcy options. Filing for bankruptcy can be just what your credit needs. CLICK HERE FOR FREE BANKRUPTCY CONSULTATION.

Did you know it is much easier for most people with really bad credit to buy a car with a recent bankruptcy filing than without a bankruptcy at all? It is really simple once you think about it. Most people that file bankruptcy have had a period in their life that they paid all of their bills on time. More often then not, people that are filing for bankruptcy are good people that want to pay their bills, but some unexpected circumstances put them in this situation. Now that you have no other bills, it is a great time to buy a car or truck because you probably have some extra money each month to afford the car payment.

In addition, there are several lenders with car loan programs specifically designed to help people that have recent bankruptcies. With bankruptcy car loan programs, your credit core does not matter. Things that do matter include: proven ability to make a car or mortgage payment in the past, steady PROVABLE monthly income (using pay stubs), and a good debt to income ratio. With those 3 things, almost all people with recent bankruptcies can be approved to buy a car through WashingtonAutoCredit.com.