Debt Consolidation Credit Counseling In Phoenix

What if you need a bad credit lender? Do you know what one is, or what kind of credit is "bad", in the first place? Well, for starters, standards for what constitutes bad credit can vary from credit bureau to credit bureau. It's generally accepted, though, that credit is deemed bad when it sinks below a 500 score as ranked by the Fair Issac Credit Organization (FICO).

Credit Ranking Services: There are three big credit ranking services out there: TransUnion, Equifax, and Experian. Each has its own formula for developing what's called a "FICO score." What's known is that scores from the three usually are within twelve or so points of each other, most of the time. Additionally, scores are generated using several different inputs.

Lenders Who Specialize in Bad Credit: Most lenders of this type deal in the sub-prime finance markets. This means that any loans you take from from them can be a bit costlier, overall. But a need exists, because even persons of good character can run into challenging credit situations. In tough times, bad credit lenders can do a lot of business.

Varying Lending Rates: Because the risk to the lender is greater, the interest rates on these loans can be higher. Sometimes by a lot, as illustrated by loans that go right to the interest limits set by law. You should check around, though, to see if one of these sub-prime lenders will offer a better rate before signing any loans.

Beware Loan-Shark Lending: Sub-prime lending serves a useful purpose, especially when truly good people fall on poor credit issues. Some probably have nobody else to turn to in tight credit markets. It's best to keep an eye out, though, for lending which resembles loan sharking in appearance. By this, we mean tacking on double surcharges, extending the life of the loan without permission, and funny service charges, for example.