Voices in Finance » Bad Credit

What Does the Bank of America Sale Mean for You?

Mike — Tue, 30 Aug 2011 08:11:28 +0000

This month, Bank of America has announced that it is leaving its UK and Ireland credit card businesses.

This follows other moves to transform Bank of America’s credit card operations such as the sale of the UK arm of the business lending portfolio and its sale of the Spanish credit card business.

The Bank of America credit card business was huge in Europe, amounting to $19 billion in credit card loans in Europe alone.

However, after reporting record losses of $8.8 billion in the quarter ending June 2011, Bank of America has decided to sell elements of its portfolios outside the U.S.

But if you hold a Bank of America credit card in the UK or Ireland, what impact will this announcement have on you?

Your debt will be moved on to whoever purchases Bank of America’s credit card loans portfolio. In April 2011, Bank of America sold £200 million of small business card loans to Barclays.

Generally, whoever buys Bank of America’s credit card loans will honor any existing promotional rates you had with Bank of America. But be warned, if you miss a repayment your interest rate will automatically switch to the standard APR.

Similarly, if you spend on the card, that new debt will be subject to the standard APR also. You should receive a letter stating to whom your outstanding credit card debt has been moved to.

It should also let you know if your existing terms and conditions remain the same and whether any direct debit payments will be automatically transferred over. It may be time to investigate transferring your debt to a credit card with a promotional rate.

If you are worried about the extent of your outstanding credit card debt or are unable to secure any more lending due to your credit history bad credit credit cards may be an option for you.

Bad credit credit cards allow you to borrow while you work on improving your credit rating. These credit cards will not offer any special interest rate; in fact, they will probably be above the average APR on the market as you are viewed as high risk.

The way to operate these cards is to pay off your balance in full every month so you do not incur any interest charges. By operating the card perfectly for a period of time, maybe six to twelve months, you should be able to rebuild or improve your credit score.

This should give you access to more and better borrowing options in the future. It should also help you adopt a responsible lending approach, only borrowing what you need and making repayments in full.

The unstable economy has made lenders much more cautious about lending and credit is certainly not as easy to get as it was a few years ago. Seemingly stable institutions like Bank of America with a long and successful history have stumbled in the global recession.

Clawing back losses for banks means higher interest rates, more conservative lending and passing on your debt to other institutions.

It is prudent to keep an eye on the companies you are involved with and make sure there is not a better deal out there that will give you a better interest rate.

Cleaning Up Bad Credit

J. Hamilton Fraser — Tue, 22 Feb 2011 21:41:07 +0000

Have you been getting behind on your monthly credit card bills, or getting rejected by lenders? If yes, then you are just one of the 43 million individuals in the United States who are being affected by this difficult economy. TotallyMoney explains that getting a dismal credit report can be expected during these tough economic times, but you do not have to let yourself drown in it. In fact, there are a number of opportunities that can help you redeem your good credit standing.

Go for a Secured Credit Card

To get your credit rating back on track, you have to find ways to prove that you are a good credit holder, and acquiring a secured credit card can be your first step. A secured card is one that is funded by money that you have deposited in the bank and your credit limit is defined by the amount that you have.

Acquire an Installment Loan

As credit bureaus are looking at your capacity and attitude towards handling your finances, getting a personal loan and fulfilling your payment obligations can initially push your scores up. As you are still yet to work on your credentials, you can explore loans for people with bad credit such as those being offered in community and union banks.

Pay More Than the Minimum Amount Required

Credit bureaus considers how you pay your credit bills and places prime points on those that maintain a significantly big gap between their outstanding balance vis a vis their credit limit. A good way to achieve this is to pay for more than the minimum required, so that you maintain a lower balance. Prioritize settling cards where you are in most debt then move your way to the rest of your credit accounts.

Stick to What You Can Afford

Curtail your credit card use if you can’t afford to pay for it. Credit bureaus look into your outstanding balances and by restrictng your spending to use only a quarter of your allowable limit, then you can avoid worrying about your credit standing.

Maintain a Long Standing Credit Card Account

Most of us get excited with the arrival of a new credit card and just puts the old ones at the back of our wallet but financial experts recommend using these old cards from time to time to keep them active, as credit bureaus favor individuals who have maintained a good standing credit card over time.

Follow these simple steps and you are well on your way to getting back a credit report that you can be proud of.

Bad Credit Loans and Those the Need Them

J. Hamilton Fraser — Mon, 25 Oct 2010 04:48:48 +0000

Today our society has turned its thinking into an “all about me” mentality. When we need something done, not only do we want it done now, but we want it done first. Our needs are more important than the next guys, right? Keeping that thinking in mind is what has made applying for personal loans for people with bad credit move into the forefront with technology. Not only is the information easy to get and research, you can do it all from the comfort of your home.

When this technology began to evolve, no one could imagine just how easy the computer world could make our lives. All the information you could ask for has become available at your fingertips. The best part of all this; when you have questions, chances are, you can find the answers right in front of you. This is another way to be more efficient in today’s world. When you are doing research for a bad credit loan, you will be amazed at the amount of information you can gather in minutes. No more listening to what someone else thinks or believes. You can find it out for yourself. The more information you gather, the more comfortable you will feel with your decision.

Applying for a bad credit loan is quicker and easier than ever before. If you want to be even more efficient, being prepared before you sit down in front of your computer will save you a lot of time and frustration.

The first thing you want to do when looking for a bad credit loan online is research. The more information you can gather the more informed decision you will be able to make. When it comes to your financial future you can never have too much information. Look at getting anywhere from 3 to 5 quotes. I suggest this because it will show you the variety of offers that are available to you. Be cautious, what may look good on the surface, may not be so good when you start comparing it to other quotes.

The biggest advantage to a fast cash online loan is less is required on your part. Most of the time, as long as you can provide proof of employment; you are guaranteed to receive the loan. Providing proof can be as simple as having identification from your employer or a recent paystub. Chances are the lender will verify your employment, so be honest.

The drawback to this type of loan is the interest rate. Although, this is a very easy loan to qualify for, there is a reason that you are seeking it. Chances are a conventional lender will not take the risk. Taking a fast cash loan is a good step in repairing your credit. Make sure you are able to repay the debt. Nothing hurts your credit more than taking a fast cash loan and no repaying it. Bad goes to worse and you will begin to feel like there is no way out of this hole.

Ways To Counter Your Bad Credit Cell Phone Issues

J. Hamilton Fraser — Sat, 16 Oct 2010 16:37:57 +0000

You still deserve to have a cell phone, even if the economy is in the tank and credit companies have much stricter requirements. Thankfully there are some alternatives available to you with the bad credit cell phone problem. It possible to find companies that do not need you to go through the hassle of deposits or the expense of prepaid plans to give you a cell phone. It is even possible to find plans that include really quite extensive coverage areas.

It is hard to see the multi-billion dollar wireless networking industry needing yet more of your money, so do not be put off from shopping around to find the best deal. It is pretty common to see advertising slogans yelling at you that their particular deal is the best ever, limited time only, none better, and so on, but it seems that if you just spend some time looking you can always find a better deal out there somewhere. It is always worth investigating the claims of the company and doing your own figuring out when trying to decide which plan offers the best bang-per-buck.

Always ask about possible roaming fees, whether the company indulges in consumer credit agency reporting, the usefulness of their customer service, and the simply reliability of their service. Anything over eight cents a minute is really pushing it with prepaid phone plans, so be sure to ask about the rate per minute. See if you can get a rebate after 12 months with prospective contract phone plans. It is your money, so you should decide whether or not it is worth it, not the companies you are buying from. Always work hard to protect yourself from rip-offs by asking the hard questions.

Just living can cost a lot more if you do not have good credit to begin with, or do not have any at all. Taking the time and effort to carefully research each company’s bad credit cell phone offers will certainly pay off in the long run, and you will save both cash and headaches long-term if you do the requisite homework.

What Is The Imagine Credit Card

J. Hamilton Fraser — Fri, 08 Oct 2010 23:21:51 +0000

Today the credit situation is worse than it has been in the past. If you have a low credit rating and have bad credit reports to your name it is near impossible to get a loan and or a credit card. A few years ago the pre paid credit card was introduced and people that found them selves in the above situation had their life’s made quite a bit easier.

One card was the Imagine credit card. You can get the Imagine credit card in three different levels, but you should be aware this is not a secured card. This is a proper credit card, but there are some differences. With the Imagine credit card you need to have a minimum amount deposited in your account,, but unlike other secured cards the available amount you have to spend is not based on your current account balance. The three levels are, Imagine, Imagine Gold and Imagine Platinum, these have another three different levels of borrowing. For example if you have a regular Imagine card, and keep a minimum of $100 in the account you will be able to borrow up to $500. The credit you have available to you will increase with time and with you faithfully making your repayments. Imagine report to all of the major credit report agencies, so over time your credit score will increase. This means that the Imagine credit card can be used to rebuild your credit rating.

One of the great things about Imagine is that there are built in features to stop you from getting deep into debt. When you spend enough to take the card down to your balance you will be notified that you are below the lower limits of the account. This lets you stop making more purchases before you go broke. This in built protection keeps you covered incase you have a sudden spending urge.

Refinancing With Bad Credit Now

J. Hamilton Fraser — Mon, 13 Sep 2010 16:44:09 +0000

Refinancing with bad credit provides an opportunity to refinance an existing loan at a better rate. Whilst you are applying for a loan with a poor credit history, your desire to cut your interest rate costs does show that you are becoming proactive with your finances. This along with the fact that this is a refinancing, not just a new loan, gives you improved chances of receiving a refinancing offer.

The key factor with any lending is your recent credit history and the current credit score. Given that you have bad credit, this is likely to be less than stellar, but there are still things you can do. Different lenders are available depending on how poor your credit scoring is. Their terms, length of the loan and interest rates will vary and you can draw comparisons between them.

If you wish to work to improve your scoring, you can do so by doing a good job of making your payments on time. This will be reflected in your credit history later and the scoring will be updated to reflect this too. This will increase your chances of receiving more financing offers in the future and at lower rates.

Lenders are in the business of loaning money in order to profit from the transaction. They would usually prefer that you borrow from them and repay someone else, so that their loan book expands with good customers and their capital does not sit idle. As long as they can ensure that you meet the standards required, they will want to loan their capital to you. If the loan is secured against a property, then they will have more confidence in doing so because the property acts as security.

Refinancing with bad credit is a viable option for those that have a loan or mortgage that they wish to refinance at a lower rate. If you have managed your financial affairs better recently than in the past, you might be able to benefit from lower rates. Check it out to see if you can save money.

Repair Your Credit Score By Taking Out A Credit Card – Wait, What?

Mike — Sun, 11 Jul 2010 09:38:25 +0000

This is a guest post from Louise Tillotson:

Get a credit card to repair a bad credit file – sounds like an oxymoron, doesn’t it? Most people think that the best thing to do if you have a bad credit history is simply to avoid all possible forms of credit like the plague – and I’m not here to say any different. This technique does work, and there’s nothing wrong with it. But if you want to take an active role in improving your credit score, rather than simply waiting for the bad stuff to disappear from your file, then there are other things you can do.

Previously, anyone with adverse entries such as defaults, CCJs or IVAs on their credit report found it nearly impossible to get a credit card. This got worse as the economy tightened, and now even people with a few missed payments on their files are finding themselves tarred with the same brush. And if they have no previous credit, then getting that first card is almost an exercise in futility as banks don’t want to take the risk of lending to an ‘unknown’.

But credit cards do exist which will actually help people to either build or repair their credit rating. These are called, respectively, credit builder and bad credit credit cards. Although the two are essentially similar, there are differences in the lending criteria.

The former, credit builder credit cards, are specifically designed for people aged 18 or over who have never had any form of credit in their name before. The lending bank has no idea how a person will manage their money as there are no precedents, so the APR on these cards can be rather high to reflect the risk. Approval is based on current financial circumstances and an estimate of how the person could manage their money.

Bad credit credit cards are targeted towards people who have had financial difficulties in the past, resulting in missed payments, defaults or CCJs being placed on their reports. While standard card lenders look at the past 6 years of a financial record when considering an application, lenders for ‘bad credit’ cards will also take into account the current circumstances: if the applicant’s salary has recently increased, or they have cleared off a lot of existing debt, then this will all count in their favor.

Both types of credit card carry higher than average interest rates, and they’re unlikely to have any 0% interest periods, so these cards aren’t designed for a high volume of spending. They can be thought of as a tool for demonstrating to future lenders that the owner can manage their finances and make timely repayments.

With all credit cards, it’s best to pay off your balance in full each month if you can. This will not only look good on your credit file, but you could also avoid paying the interest which, on the cards detailed above, can be as high as 39.9% APR.

[bio]
Louise has worked in the financial sector for many years. She currently works as a writer for Moneysupermarket, and writes financial articles for a number of other sites as well.

How to Get a Cell Phone with Bad Credit

J. Hamilton Fraser — Sat, 05 Jun 2010 09:09:55 +0000

With the economy being in the shape that it is, a number of folks are looking into how to get a cell phone with bad credit because they are finding themselves being turned down by the major national cell phone service providers and as such they are finding themselves in a cell phones bad credit situation, with no alternative options seemingly available. Thankfully, there are indeed a number of options available to you, one of which will give you the opportunity to improve your credit as well.

The primary way that people get around this entire issue is by going with prepaid cell phones and pay-as-you-go cell phone plans. You can usually find these cell phones at local retail locations like Wal-Mart, Best Buy, and sometimes even gas stations and other convenience stores. Another type of pre-paid cell phone plan that you can go with is the non contractually based monthly cell phone service plans that most of the major networks are providing for people these days. One of the great companies to go with his T-Mobile, as they have plans that are very generous and start as low as $30 per month provided you purchase a cell phone from them at retail cost, or you provide your own compatible model cell phone.

Another alternative to getting bad credit cell phones is to simply pay the required and fairly substantial initial deposit fees that most of the major cell phone service providers require upfront before signing you up for new service. These can range in price anywhere from $200-$800 or more depending on the company and the service plan and phone you’re looking to go with. The good news is, that if you make all of your monthly payments on time for at least a year, most of these companies will credit your cell phone account with the entire deposit you made upfront initially before hand. The added bonus to going with this option, is the fact that you will ultimately help improve your overall credit score which could help you in a whole range of situations.

Emergency Loans with Bad Credit

J. Hamilton Fraser — Thu, 03 Jun 2010 23:36:53 +0000

Too often today, many individuals are faced with a financial emergency without the proper funds to cover them. If one has bad credit then it is difficult to obtain the necessary funds. Although, there are options that are available now to help these individuals. Emergency loans are becoming more popular as the need for finances increase for those with poor credit.

A personal loan has helped many people with hopeless situations. They are fairly easy to receive with a little determination. There are secured and unsecured personal loans. With a secured loan, one would need something of considerable value to use as collateral to secure the loan. These loans have a much lower interest rate. If the borrower defaults on the loan, the lender can legally use the collateral to recover their loss. With an unsecured loan, there is no collateral required to procure the loan. These loans do have a higher interest rate as a result of the risk the lender is taking on the borrower.

There are also payday loans one could consider in a cash flow emergency. These loans are very short term and entail the amount plus interest fees to be paid back with next pay date of the individual. These loans are very easy to get and requirements are few. They will request proof of employment, bank statements for last two months and proof of utility bills in one’s name. The amount one can borrow is usually around $100.00- 350.00. These loans are great when there is a real emergency but should not be considered for unnecessary purchases. If one is not careful, these loans can be quite difficult to escape from. It is best to pay off the loan with your next paycheck and not borrow additional funds.

Cash emergencies occur everyday to good people that happen to be low on cash and have a bad credit history. There are options that can be recruited to secure finances for an emergency situation.

The Mortgage Options For Those With Bad Credit

J. Hamilton Fraser — Tue, 27 Apr 2010 08:43:37 +0000

A bad credit mortgage is synonymous with the sub-prime mortgage, that has been in the news since the advent of the downturn in the housing market. This type of mortgage covers people who obviously have less than stellar credit, whether from their own poor management of money or unforeseen circumstances, such as a major illness, leading to a bankruptcy.

Under any circumstances, the people whose credit is not good, like somewhere in the low 700s as rated by the 3 credit rating agencies, such as Equifax, will be penalized when it comes to obtaining a mortgage. The credit rating is expressed as a FICO score, though banks and lenders use more than this as the criteria for determining the creditworthiness of a mortgage seeker.

A bad credit mortgage, in most cases, will entail paying a higher interest rate and having to put down at least 20% of the price of the home. Unfortunately, 95% mortgages are often not available to those with a poor credit history. Banks are presently not in the mood to make risky mortgages, so these people will even have difficulty in obtaining a mortgage at a higher than average rate. In addition PMI (Private Mortgage Insurance) which will be an additional monthly payment, will be required by all those fortunate enough to get a mortgage without putting down 20 %. This insurance paid by the buyer insures the bank for any losses from the buyer not being able to afford the home, leading to foreclosure.

An important fact for the prospective home buyer with bad credit is that the more money put down, the better the chance of obtaining a mortgage. There is a formula the lenders use that can compensate for a low FICO score. The more money put down on the home, the higher the FICO score goes in relation to getting a loan. The FICO score will not rise but the added down payment will add points to the score, solely for the purchase of the home.