There are two basic categories that most loan types fall into – Unsecured and Secured.
On the other hand, unsecured loans are the opposite of secured loans and include things like credit card purchases, education loans, or personal (signature) loans. Lenders take more of a risk by making such a loan, with no property or assets to recover in case of default, which is why the interest rates are considerably higher. If you have been turned down for unsecured credit, you may still be able to obtain secured loans, as long as you have something of value or if the purchase you wish to make can be used as collateral.
When you apply for a loan that is unsecured, the lender believes that you can repay the loan on the basis of your financial resources. You will be judged based on the five (5) C’s of credit — character, capacity, capital, collateral, and conditions – these are all criteria used to assess a borrower’s creditworthiness. Character, capacity, capital, and collateral refer to the borrower’s willingness and ability to repay the debt. Conditions include the borrower’s situation as well as general economic factors. Continue reading “Unsecured Loans vs. Secured”
Society is becoming increasingly dependent on using credit to make purchases and decisions. These days, good credit is used for more than just getting a credit card or a loan. More and more businesses are making the case that you must have good credit before they extend products or services to you.
It Affects Where You Live and How Much You Pay
Before you can buy a house, mortgage lenders want to know that you won’t default on your mortgage.
If you don’t have good credit, the lender will consider it risky to give you a mortgage loan. If you’re approved for a mortgage your credit affects your interest rate which directly impacts your monthly mortgage payment. Bad credit could mean a higher mortgage payment. Worse than that, your mortgage application could be turned down because of your bad credit.
Continue reading “5 Reasons Why Good Credit Matters”
Got bad credit? You’re not alone. According to a breakdown of credit bureau Experian’s 2015 VantageScore 3.0 data, close to one-third of Americans have a credit score lower than 601 — and, yeah, that’s not so hot. Finding out you’re in that lowest credit echelon often comes at the worst time. You’ve just applied for a credit card, a car loan, a mortgage or even an apartment, and you were rejected. Along with the dream-crushing news comes a letter that spells out the reasons you weren’t approved. It may say things like “Too few installment accounts” or “No recent revolving account activity.” And even though they’ve given you reasons why your credit isn’t good enough to be approved, you’re still lost on how to actually fix your credit.
Time for a Credit Repair? Continue reading “Fixing Your Credit”
Nobody likes to have their security compromised even more so to have one’s identity stolen. As much as we want to be exempted from identity theft, there is just no guarantee that we won’t be targeted by those culprits. This doesn’t mean that you should take the security of your identity lightly; on the contrary, you have to be even more alert and vigilant.
If a time will come that you think you may fall prey to credit card fraud or identity theft, don’t hesitate to take the necessary actions to prevent it from happening. For example, if you have lost your wallet with your credit cards and social security card in it, don’t delay in contacting your creditor and have the card cancelled. Then immediately have a fraud alert placed on your credit report to help prevent a possible identity theft.
The name itself explains it; fraud alert basically notifies businesses or anyone who would pull up your credit report that your information has been compromised. The entities that have pulled up your credit report would then have to take extra measures in verifying that the person applying for a loan or a credit card is indeed you.
Placing a fraud alert on your credit report is free and you can do it on your own. So there shouldn’t be a reason for you not to activate this feature, if your personal information gets compromised. Continue reading “Fraud Alert”
Your credit report contains all sorts of personal information: your address, employment history, social security number, etc. This report also bears the summary of your credit history, your account numbers, and overdue accounts. If you have accounts that were turned over to credit agencies, these will also show in your credit report.
All this information is very useful to organizations, as they can determine if you are eligible to acquire their services. Continental Finance will access your credit report to decide which credit tier would suit you best. Many credit card companies are quick to reject applicants based on a negative credit report. However, Continental Finance takes time to thoroughly review the applicant’s history to ensure fair treatment with the goal of giving consumers the opportunity to rebuild their credit score.
It’s not just financial that will need access to your credit report. Employers may require a credit history screening. If you are looking to rent an apartment or house, many landlords will check your credit report to determine if you will pay in a timely manner. Basically, most organizations that you have initiated business with will probably need to check your credit report to determine your eligibility.
You should also know, many lenders and merchants purchase memberships to credit bureaus for fast and easy access to customers’ credit history. However, credit bureau members have a contract limiting their usage; they are only allowed access when they are considering persons for employment, extensions of credit, or other legitimate business reasons.
If you’re now worried about the safety of your credit report information, you shouldn’t be. There is a law established that protects your credit report information. The Fair Credit Reporting Act (FCRA) specifies who are allowed to access your credit report and why. This act states that a company/individual must have a legitimate reason to view your credit report. Any organization or individual who acquires a copy of your credit report under false pretenses can be fined and jailed for up to a year.