If you need money quickly but have bad credit then a bad credit home equity loan may be your only choice to get the money you need. Many lenders look at loaning money to persons with bad credit based on the equity in their home. The interest rates are higher than most other people pay for a home equity loan, however.
If you have bad credit there may be some things that can be done which will help to improve your credit score. You will need to begin by ordering copies of your credit reports.
The United States laws require that you be provided a free annual credit report every year. In addition, you can request a free copy any time you are turned down for a loan. You will need a copy from the big three credit reporting agencies.
Once you receive these reports, you will need to examine them closely. In addition, you will need to know the statute of limitations for collecting debt in your state. The credit reporting agencies can report a derogatory mark on your credit report for up to seven years. If there are any debts that are on the report that you last made a payment on over seven years ago, you will need to send a letter to the reporting agency asking that they be deleted from your credit report.
Nest you should know the statute of limitations for collecting debt in your state. If you are in the right state, a company only has four years to collect the debt. If any debts are out or your states statute of limitations, ask for an investigation by the credit reporting agency. Dispute the debt as not mine, since you are no longer legally responsible for the debt. Many collectors know that there is nothing they can do about the debt, so they will let it fall off your credit report rather than waste any more effort on trying to collect the debt.
You will also need to send a letter to the company reporting the bad debt. Their address is listed on the credit report. Ask them for proof that the debt is yours. If they cannot provide the proof they must stop reporting it on your credit report. They only have thirty days in which to investigate and answer your request. Your return receipt will have the date they got the mail and start the clock ticking.
As mentioned earlier, the cost of certified mail and the return receipt is small compared to the amount of money this may save you in interest charges on your loan.
Many times these two letters are all that are needed to change a bad credit report into a decent one. In a matter of just a few months you may qualify for a much better interest rate on your home equity loan than if you had only qualified for the bad credit home equity loan. It is certainly worth a try if you have the time. The work can save you several hundred dollars over the life of a home equity loan.