Chapter 11. Loans and Your Credit Score
Loans impact your credit ranking rating more than almost any other product on your credit ranking score. The types of loans you have, how long you have had loans, the quantities you owe and your transaction record on your loans has one of the greatest effects on your credit ranking score. If you can control your loans, you can increase your credit ranking score. There are a few tips that can get you well on your way to effortlessly handling your loans:
Tip #68: Re-finance loans
If you got a poor deal on a loan - especially a major loan such as a car or mortgage loan - or if your credit ranking score has improved since you got your loan, you may want to consider re-financing. Refinancing means that you take your loan to another loan provider in order to enjoy better terms or rates.
You don’t want to do this too often - it prevents you from developing long-term relationships with lenders and results in queries on your credit ranking report - but if you have explanations to refinance, it can actually help you pay back your debts. For example, if you can get more reasonable regular expenses that you will actually be able to pay back, re-financing can help prevent all those non-payment credit ranking dings that come from not being able to pay your expenses. Making your payments more affordable can conserve your funds and can save your credit ranking score.
In the short-term, re-financing can push your credit ranking score down, as you will acquire queries on your credit ranking report as you look for a new loan provider and as you close old accounts and open new accounts. In the long run, though, re-financing can be a good way of boosting your credit ranking score. If you are now missing or delaying payments because you cannot afford regular expenses, for example, re-financing a loan or two can be a good way to get back on track and can get you improving your credit ranking score rating again.
Tip #69: Look for loans that are offered for poor credit ranking risks
If your credit ranking score is bad but you need a loan, consider services that cater to people with a poor credit ranking scores. These companies know that some creditors with a poor credit ranking score will still make their payments on time and so are willing to speak with debtors other companies would reject out of hand. You may have to deal with higher rates of interest, but choosing a poor credit ranking mortgage lender can go a long way to ensuring tha