A wise friend once told me that *extraordinary people* are just *ordinary people* who do extraordinary things.
It’s the same way with loans. People that get loans after being turned down are not extraordinary people, they are ordinary people who do extraordinary things to get their loan.
Here’s an example of what these extraordinary things could be for those that may have been previously turned down for a loan or that may have credit problems:
-Correcting incorrect credit issues
-Getting good advice and sticking to it
-Not giving up if the first lender says “no”
Keep in mind that this article is not designed to replace financial or legal advice. If you need financial or legal advice, you should seek the services of a competent professional.
There is a lot of information about personal loans that is just plain … wrong! It is our desire to set the record straight here.
We are also sick of how the credit bureaus seem to think that they are the ultimate authority as to who can get a loan. If you don’t agree with the credit bureau–you can forget about any chance of getting a loan–or so they say.
There has to be a solution somewhere.
Some of you reading this have more extended credit problems that you have to deal with every day. I know that it is not fair that you are continually punished with excessive interest rates and loan turndowns.
Why Credit is So Important Today
If you have good credit, it seems that you can walk into any store and say *charge it* and walk out with hundreds, if not thousands, of dollars of merchandise.
For millions of Americans, good credit like this seems so hard to attain. Many of us are able to start off with credit cards and loans–but over time, an emergency comes up and causes us to get behind on a payment.
In many cases, we find a way to financially recover, but the credit damage lingers on for a long time. Once this happens, everything you purchase on credit costs a lot more.
If you have ever desired to be debt free, it is important to have the best credit possible. That way you do not have to pay extra for everything and the money you spend goes to pay down debts as quickly as possible.
If you have credit problems and are applying for a loan, one of the best things you can do is prepare a list of the loans and credit cards you have paid off in the past. Give this list of good credit references to the lender when you submit your application.
This will help the lender in the loan decision because many credit reports do not list your good credit or *on-time* references. However, when you are late with a payment that information shows up quickly.
More and more lenders are finding ways to help people that don’t *fit in the box.* But there are still millions of people that are turned down for a loan each year. It is those people that we want to help by giving them the ability to get a fair shot at rebuilding their credit and getting loans.
The first thing to do in rebuilding your credit is to get a credit report from each of the three major credit bureaus: Experian (TRW), Equifax and Trans Union. Check each report carefully for errors and any derogatory information.
Do not get a tri-merged report where all the information is combined from these three credit bureaus. A tri-merged report makes it hard to distinguish which credit bureau reported which individual item.
If you tell one credit bureau about a disputed item that is on a different credit bureau’s report, you may now find that both credit bureaus will report it–leaving you worse off than before.
When you get your credit report, you will also receive paperwork that will allow you to dispute incorrect information. Fill it out and send it to each credit bureau for any inaccurate information being reported.
The following list shows the rank of derogatory information in order of damage caused. The hierarchical ordering, from most damaging information to least damaging, is as follows:
Late mortgage payments
Late revolving credit payments
When you get credit reports from each of the three bureaus, you will find that some of the questionable information is duplicated on one or both the other credit reports, but not all will be.
It is very important that you dispute each questionable item individually.
If you try to dispute *several items* at the same time, the credit bureau may claim that your request is frivolous and refuse to investigate it.
Creditors do not have to report to the credit bureau. So if you dispute an item and the creditor does not verify it, then the item will be removed from your report. The credit bureau has 30 days to verify the information.
Personal Loans Defined
You see the term personal loans used by a lot of different lenders. Each lender may have a different idea of what a personal loan is.
Some lenders define it as a small loan secured by real estate. Some lenders define it as a small loan secured by an asset. Some look at it as a loan only secured only by your promise to repay (a signature loan).
When working with a lender, you need to decide what it is that you will use to reassure the lender you can repay the note.
Keep in mind that it is easier to get a loan secured with real estate if you have credit problems, than it is to get an unsecured personal loan.
Once decided, you need to only work with lenders that handle the type of loan you are looking for.
For Credit Problems
If you have credit problems, your choice of lenders is very narrow. Your best bet is to contact lenders and explain your situation, then see what they say.
Also ask your friends who they have gone to for loans, you might find a good introduction to a loan officer that way.
Getting Personal Loans
The application process for personal loans is fairly simple and you can usually have an answer within minutes of applying.
Be sure you bring the following information with you (or you may already have some of it memorized):
–Current and Previous Address
–Social security number for yourself and spouse
–Salary information & paycheck stubs
–Two years’ tax returns (if self-employed)
–Drivers’ license and vehicle information
–Employer address and length of employment information
Applying for a Personal Loan if you Have Credit Problems
If you have credit problems, you may already be aware that the process becomes more complicated.
You’ll have to explain what the situation was that caused the credit problem and then see if the lender will go for it.
If you have credit problems, do not apply for a loan until you get your credit report into the best shape possible. Otherwise, what happens is that when you apply, it creates an inquiry on your credit file and when subsequent lenders see that inquiry it makes it harder to get a loan. In other words, each lender will think, “why should I give you a loan when XYZ company down the street turned you down?”
If you need the loan quickly, and have credit problems, you are limited in what you can do. One of the best things we have found is to go to lenders that you have loans with currently and ask for an increase in the credit line you have. This works best for lenders where you have an *on-time* payment history.
Explain the situation to your lender and that you want to try to keep any credit problems from getting worse.
If this doesn’t work, your next move is to go to lenders that you had loans with in the past. Ask them if they can reopen a line of credit. Many lenders prefer to work with previous customers than having to find new ones.
If you have credit problems, getting any type of loan becomes very difficult. That is why we created because we believe everyone has a right to borrow money.
Common Problems in Applying for a Loan
The most common problem when people are turned down for a loan is from credit related items.
For example, one of our members had someone else’s bad credit on his report. He did not find out until he went to apply for a loan and was surprised. In his first dispute, the derogatory information was not removed. Afterward, he checked with us. We told him that he needed to send a dispute to both the creditor and the credit bureau and that he needed to send copies of proof of payment. We also showed him what to do if that did not work. Fortunately, it was removed by following our advice and at last report he was approved for a $4,000 computer purchase.
Another problem is in verifying income. Many lenders will only consider income coming from a source that is at least two years old. What you can do to overcome this is to show paycheck stubs and bank statements covering several months.
Another problem is in understanding exactly when it is that you are applying for a loan. I know this sounds funny, but many lenders have made it look like you are preapproved when in fact, you are not.
For example, one nation-wide loan company is known for sending out letters stating that you are *pre-approved* for $3500-$5000. When you go in to get the loan check, they tell you that they will need some verification information so they know who they are giving the check to. They then ask you enough information to run a credit check (without telling you) and decide how much you can borrow. This is different than what many people would *expect* for a pre-approved offer.
Because they do not tell you about running a credit check, it can hinder your ability to get a loan somewhere else–because of the added inquiry.
If you have credit problems and still want to try for a loan like this, insist on seeing the manager before applying and tell the manager your situation and ask what options are available.
Don’t let anyone run a credit check if you do not have a chance for approval-any more than 5-6 inquiries in a 6 month period will hurt your chances of getting a loan.
If these sources don’t work, try the bank where you have your accounts. Some do loans, some only do credit cards, and sometimes you can use a credit card in a manner that you would with a loan. Your local bank may be willing to overlook a few problems, in order to keep your business.