You have likely seen the surveys reported by the media: half of Canadians live paycheque to paycheque, most Canadians don’t have emergency savings, a majority of Canadians don’t have any retirement savings. This certainly will provide you with a high level of stress and concern.
Life happens. We try our very best to budget our monthly earnings, ensure we set aside enough money for a rainy day and live within our means. Unfortunately, again, life happens, and those financial objectives can seem impossible to achieve.
Someone gets sick. Someone loses their job. Someone’s car breaks down. When these things happen, our finances as well as our credit will ultimately take a hit. And this can affect you, especially when you’re trying to obtain a loan.
Thankfully, there are many debt consolidation and mortgage refinancing options that you can take advantage of when you have horrid credit.
Here are five tips to get approved for bad credit finance options:
1. Know Your Credit Situation
First, you must know your credit situation in advance of the application process.
It is important to know the precise details and specifics. A general ballpark figure won’t help you at all. Plus, if you do an extensive search on your credit score, you can perhaps come across some discrepancies that you were not in charge of.
Whatever you do, know your credit rating far in advance of your loan options.
2. Be Realistic with Funds You want
When you walk into a bad credit finance establishment, or you enter the lender’s web portal, you need to remain realistic with the funds you are requesting.
Whether you have a poor credit score or you are unemployed, you don’t want to ask for the moon, or, you know, $100,000 to buy a Mercedes Benz. You want a modest sum for your emergency or purchase.
3. Always Get Pre-Approved First
You may be applying for an automobile loan or for a mortgage, but you should always get pre-approved first. By doing this, you can know how much you can work with in your crusade to acquire a new car or a new home.
4. Get Ready for Higher Interest Rates
Although bad credit finance options will help anyone, the caveat is that you will be required to pay higher interest rates. This is basic economics: since bad credit finance businesses will be working with high-risk customers, they need to ensure that they are protected, and a higher rate of interest achieves this.
But you need to budget for these higher rates.
5. Don’t Use Multiple Outlets
One of the worst things that can happen to your pecuniary plight is applying to multiple bad credit finance facilities. By trying to obtain funds from several sources in a short period of time, not only will your applications likely be rejected, your credit score will take another hit.
Moving forward, you should only apply to one business at a time – you don’t want to be indebted to various lenders do you? Of course not!
Life comes at you pretty fast. First it’s your job, then it’s your car, then it’s your child getting sick. It seems like there is always a fire to put out: career, money, family. It never ends.
We all want to lead fiscally responsible lives, and we do our very best to ensure that we enough funds to get through tomorrow. It just doesn’t work out this way for a myriad of reasons.
Bad credit finance options are available for instances like these. You may have been reckless when you were in your youth or you may have been extremely ill for a couple of years. Whatever the case, you can be relieved that there are solutions out there for your unique situation. Just be sure that you can afford them.