There may come a certain stage in life that you begin yearning for a fast car, or perhaps a sports car. Some people refer to this as going through a mid–life crisis, trying to recapture their youth, but is that true? It may be more a case that when at middle age it is now more affordable to get a sports car, even if buying it means taking out some form of bank loan or other credit. Insurance is cheaper for the more mature driver and perhaps mortgage repayments now take less from the total family income.
Middle age is a time when most have more disposable income, and when the dream becomes more of a reality of buying that sports car. But where is the best place to go when looking for a loan?
There is no doubt the days of cheap credit are over. Indeed, since the onset of the recession, banks are much more cautious about whom they lend to, so you may fear you will not be able to buy a sports car.
The Credit Crunch Makes Bank Loans More Difficult to Obtain
Understandably, banks have become far more cautious about granting loans since the advent of the credit crunch. Mortgage approvals, for example, have declined and loan interest rates aren’t following the base rate downwards. Credit cards are harder to come by too, so if you’re in need of credit, then you might find it more difficult to get accepted than would otherwise been the case.
When applying for a credit account to manage your debts, or to just free up some cash to allow more spending power, you should first consider the state of your credit rating. This is the primary factor within the application process a lender will use to assess the risk you pose to them.
The riskier you appear on the rating the unlikelier it is for you to get the best rates. In the worst case scenario you won’t be able to get any rate. However, this is unlikely; you should be able to get a rate of some description, even if it is extortionate.
Finding Out Your Credit Score
It may be you have been very careful with your finances throughout your life and you have not had a mortgage or other loan for years. If so you may not have a current credit score. So, if you want the cash to buy that sports car, how do you know if your application for a loan will be accepted? You need to check your credit score and you can do this easily.
Be careful providing your full Social Security Number to any other websites!
The Best Free Credit Report Sites
| NAME | FUL SSN REQUIRED? | WEBSITE |
|---|---|---|
| AnnualCreditReport | Yes | annualcreditreport.com |
| CreditCards | Last 4 digits only | creditcards.com |
| Credit | Yes | credit.com |
| Credit Journey | Yes | chase.com |
| Credit Karma | Last 4 digits only | creditkarma.com |
| Discover Financial | Yes | creditscorecard.com |
| Credit Sesame | Last 4 digits only | creditsesame.com |
| Capital One | Yes | capitalone.com |
| Experian | Last 4 digits only | freecreditscore.com |
| LendingTree | Last 4 digits only | lendingtree.com |
Other factors that affect your credit score are wide ranging, although not particularly complex. Two of the most important factors are how much debt you are currently carrying and how many payments on a credit account you have missed over the last two to three years.
Factors That Affect Your Credit Score
If you have a lot of debt and have missed a number of repayments, this will negatively affect your score. Three things that will put you in particularly bad stead when making an application are previously having a County Court Judgement, bankruptcy, or defaulting on a credit account.
Even if you have a negative credit report, however, the situation is not irredeemable. There is no such thing as a permanent black list for credit reference, so even if your past report is very poor, you can turn it around.
Initially, if you do have a bad score, you’ll probably find that the most competitive rates are out of your reach. However, you can repair your score by taking out a credit card with a very high APR, borrow a small amount by spending every month and then paying it off in full. If you make every repayment, then over time your credit score will repair itself. Be careful though – there is no quick fix.
