What effect with the current market crisis have on my credit cards?
Question by happydawg: What effect with the current market crisis have on my credit cards?
I have several credit cards. Most of them have a zero balance. I do notice the credit card companies keep sending me blank checks wanting me to take advantage of low interest rates theyre offering.
Will the financial troubles have any effect on my credit cards? If so, what?
Best answer:
Answer by Tom P
The government is talking about eliminating 0% interest teaser rates on credit cards. This is probably why we are getting those blank checks with 0% interest right now. It is possible that credit card companies may lower credit limits, and even cancel the accounts of some customers in order to reduce bad debt liabilities. There is likely to be a wave of credit card defaults in the near future, which may trigger some of this activity. If you have a good relationship with your credit card companies I doubt you will be personally affected.
Good Luck.
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Matters Which Can Effect On Your Chances Of Bad Credit Home Loan Approval
Currently, bad credit home loan score is FICO’s results for an individual whose credit history resulted to a score of less than 620. The national average credit score being 680, while those with more than 700 are considered as good credit scorers.
Some people were unable to avoid incurring poor marks on their credit history during the recent slump in economy. A lot of people lost their jobs and much as they wanted to, they hardly had the resources to pay for their monthly loan mortgage amortizations. Hence they came to be classified as borrowers with bad credit home loan score.
Now some of these people were able to recover and found jobs that could let them start all over again. Their current bad credit home loan score will not disqualify them in applying for a new home mortgage loan. Rather than wait for the economy to pick up which will only result to a rise in the value of real property, availing of a bad credit home loan seems like a good move.
Two Types of Bad Credit Home Loans for People with Bad Credit Home Loan Score
The first type is available to people who have bad credit home loan score but will venture into buying a home during these times while real estate properties have low market values. In fact they are more aptly classified as bad credit new home loans. Borrowers under this type of loan should expect higher interest rates, starting at 10% per annum. It will still depend on the bad credit home loan score that they currently have. In some cases, they can even be disapproved which will depend on the analysis and assessment of the borrower’s bad credit home loan score and credit performance.
The second type of bad credit home loan is extended to those with existing home mortgage loans but was unable to keep their mortgage loan payment up to date. Hence, they incurred bad credit home loan score in the process. Their inability to pay may have stemmed from lack of jobs or slump in their businesses. Since they have already paid at least 20% equity or ownership in the current market value of their mortgaged property, a bad credit home loan will allow them to take out a loan against their equity. This will be used not for the purpose of buying a new home but only for home improvements that will allow them to sell their houses at a better price or as additional working capital for their businesses.
What Can Affect your Chances of Loan Approval In Spite of a Bad Credit Home Loan Score?
The matter of a bad credit home loan score will no longer focus on the score itself. Your credit performance will play an important factor as to what caused your bad credit home loan score. Here are the different aspects that will be assessed in its evaluation:
1. The amount of loan amortizations still in default and your credit history on how long it takes you to settle said payment defaults.
2. Since when were the amortization payments started to be in default? Did they occur even before you lost your job or as a result of losing your job? The point in time when you started incurring the defaults is crucial because it will be indicative whether it was already a bad credit performance from the start.
3. Did you take up residence in the said property under mortgage or held it only as a form of investment?
4. Other negative information on your credit history such as declaration of bankruptcy, charge-offs and collection lawsuits for other loans like credit cards.
Remember that the lending company or bank will be taking a great risk in extending loans to bad credit home loan score borrowers. Some may impose higher interest rates while other will take advantage of your situation. The best thing you should do is to make a research on the lending institution who will give you the most helpful bad credit home loan despite your bad credit home loan score.
For more useful information, please visit our website: THE KNOWLEDGE BASE, and look for the BUSINESS & FINANCE section.
Written by ja_schmidt