Bad Credit Home Equity Loan

One of the best ways to borrow money if you have poor credit is with a bad credit home equity loan. Surprisingly enough, many lenders will consider loaning money to you on that basis that would not touch you with any other type of loan. Just be prepared to pay more interest on the loan than someone with good credit would pay for the same loan.

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.

Next, you can begin to work on those debts that are beyond the statute of limitations for your state, but less than seven years of age. Begin by writing a letter of dispute to the company that has reported the debt to the credit reporting agency. By law they have thirty days to investigate the debt and either send you confirmation that the debt is yours or have it removed from your credit report. If it is beyond the statute of limitations for your state, they cannot sue you in court for the money, so many will simply revise the report and the bad debt falls off of your credit report.

At the same time you send the letter to the agency trying to collect the debt, you should also send a letter requesting that the credit reporting agency investigate the debt. By law they must contact the collector that made the report to confirm the debt and make a report to you within 30 to 45 days. If the debt is not confirmed by the collector, then it must be removed from your credit report.

All of the correspondence should be done by certified mail with a return receipt requested. Although you will pay about five dollars per letter, you will have proof that will be needed if the case ever goes to court.

Many people find that these two letters will remove many of the old delinquent accounts and improves their credit score. If you do this work before applying for a bad credit home equity loan, you may be able to improve your credit score to the point that you will qualify for a standard home equity loan. This can save you hundreds of dollars in the end.