Financial Utopia – Help with credit cards, debt savings and loans.

You can obtain a home equity loan even if you have faced bankruptcy or have a bad credit rating. There are institutions that cater to this segment, however, interest rates and terms are likely to be stiffer. Additional fees also could be charged. The lender may offer high down payment and lower interest burden or vice versa. Loans with both fixed interest and variable interest are available. The maximum repayment time may be up to thirty years.

Usually lenders depend on reports by credit rating agencies like TransUnion, Equifax, and Experian, together known as FICO, to evaluate an individual’s credit rating on a scale of 300 to 900. The factors considered by these agencies include, past payment history, recent credit applications, and outstanding debt. A score below 600 indicates that you are in the bad risk group. It is possible that the rating of the same person given by each FICO agency differ. Some lenders score in the middle range.

There are ways and means of improving the FICO rating. Certain banks also offer credit counseling. Agencies approved by the U.S. Department of Housing &Urban Development (HUD) too give free counseling, including review of your financial situation. Some lenders may not even bother with FICO ratings. In such cases the maximum loan would be only 70 percent of the net value. They may insist on the borrower paying off some of the outstanding debt with the money loaned.

Do some research and see what different lenders have to offer. Don’t blindly believe everything that is said. Study them, ask questions; there is no need to feel timid about your present financial situation. And be careful. There would be people waiting to exploit your seemingly desperate situation.

7 Tips for Establishing Qualifying Credit for Home Equity & Mortgage Loans

According to Experian, a credit score is a number lenders use to help them decide: “If I give this person a loan or credit card, how likely is it I will get paid back on time?” The information from your credit reports is used to create your credit score. Your credit score will always be a key ingredient for low interest rates when qualifying for a mortgage or home equity loan.

Before getting a line of credit, get your free credit report from each of the three major credit reporting agencies (CRAs): Experian, Equifax, TransUnion. Under federal law, you are entitled to one every year. Order online at annualcreditreport.com, or call 1-877-322-8228. Check to make sure someone else’s information isn’t mixed into your report. If so, contact the CRA immediately and have them delete it.

Then, follow these tips to help you establish credit and build your credit score:

1.Establish checking and savings accounts and maintain them responsibly.

2.Piggyback on someone else’s good credit by being added to a credit card as an “authorized” (joint) user.

3.Get someone to co-sign a loan for you (e.g., financing a car, or other secured loan) and make your payments on time.

3.Apply for student loans and make your payments on time.

4.Apply for a credit card or a secured card. But, make sure the issuer reports to all three CRAs. Otherwise, the card won’t help you build your credit.

6.Apply for one gas card and one department store card to add to your credit mix.

7.Use your credit cards regularly, but wisely. Make all payments on time because the two most important factors in your score are whether you pay your bills on time and how much of you available credit you actually use.

Establishing and maintaining good credit will make buying a home a lot easier for you. You’d be able to get a good fixed rate loan instead of having to settle for a variable rate sub prime loan. It will also help for times you may need a home equity line of credit for home improvements or a home equity loan for debt consolidation, including paying off student loans.