The truth is that a poor FICO score can affect your life. Low credit scores can make loans for cars, new homes and a myriad of other needs impossible to get or far more expensive. Having a great credit score can definitely make life easier.
If you’re looking at ways to repair your credit, do your homework and find out what you can do to help yourself. Chances are a credit repair company will take your money, but not do a thing for your credit. "Credit repair schemes are a big problem for consumers," notes Eileen Harrington, Deputy Director of the FTC's Bureau of Consumer Protection. "Credit repair promoters generally charge hundreds of dollars, but don't deliver on their claims. The fact is, they can't. No one can legally remove accurate and timely information from your credit report." You are better off taking your credit in your own hands.
If you own a home with equity in it, chances are your poor credit score has a lot to do with having too much debt. If you have been missing monthly payments, have credit cards that are maxed out or have a high debt to income ratio, these things can affect your score. The good news is that you can use your equity to start rebuilding your credit.
To figure out how much equity you have, look at the CLTV. Generally you borrow on your equity up to a combined loan to value (CLTV) of 80 percent, which is the value of the first and second mortgage against the fair market value of your home. For example, a combined first and second loan of $80,000 on a $100,000 home has a loan to value ratio of 80 percent. Even if you have bad credit, you can still get a bad credit mortgage refinance or a home equity loan. The home equity loan can be used for debt consolidation, which will ultimately help your credit score. If you refinance, cash out and use the money to reduce your credit card balances and pay off debt. The important thing is to stop the cycle of spending beyond your means. Cut up your credit cards and get serious about taming your finances.
Please visit these additional financing resource websites:
To get a free loan quote for a 2nd mortgage options for people with all types of credit, please check out Bad Credit Second Mortgages. If you need more loan advice about credit lines, take a look at Bad Credit Home Equity Loans. For the latest interest rates for fixed rate home equity loans, please visit the Bad Credit Mortgage Refinance.
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