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How To Get A Visa/Mastercard With No Credit Check
Shaping Your Application To Fit The Right Profile
Creditors approve credit to those people who most closely match the
right profile. They arrive at those conclusions by assigning point values to various items
of information that are included either on your credit application or in a credit report.
Credit card companies like scoring systems because as a large volume
creditor, they can replace trained credit personnel with a relatively few employees who
can quickly total number columns and determine if an applicant's point values add up to
the right score.
Scoring, of course, is done for one reason. A creditor just wants to
know that the odds are high he will get his money back. Scoring systems are fine for those
people who fit right into the right profile, but what about those who don't but could pay
off their monthly obligations just as easily and reliably as the next person? If you are
one of those people who just doesn't "fit the mold," you'll simply have to make
a few adjustments in your application so that you do fit the scoring profile of what a
creditor is looking for in a final total.
HOW CREDITORS RATE AN APPLICATION
The first thing you should know is that every system is different. That
in itself can work to your advantage. You could be rejected by one company's scoring
system and approved by another. One creditor's system will give you many points for a good
answer, and totally ignore a question that gives a negative answer. Another creditor can
simply reverse the process.
Keeping in mind that creditors use different scoring systems, we will
list only the most important questions and briefly review how a response can affect your
total score. The following categories are listed from the highest to lowest points awarded
each response.
RESIDENCE - The longer you have lived in one place the better.
Stability is
given high points.
HOME OWNERSHIP - The best possible housing situation is to own your own
home, even if it is mortgaged. The worst is: renting an unfurnished
apartment,
living with parents, living in a trailer or motel.
FHA ASSUMABLE HOME LOANS
President Bush signed legislation making credit checks for home
mortgages mandatory after December 1989. Prior to that date however, all loans are fully
assumable without a mandatory credit check. There are four important factors that will
allow you to purchase a home without a credit check and with a minimal down payment:
1) As a home buyer, your application can be pre-approved and your loan
without a credit check provided: a) The original VA loan was granted March 1988, or
b) The original FHA loan was granted prior to December
2) If the original home buyer made a small down payment on the sale
price which was used primarily for closing costs and consequently did not
buy any equity at that time.
3) If most of the payments made by the original owner were applied to
interest during the first 4-5 years and very little went towards the principal. In that
event, very little equity would result from making payments. Or, if there was any equity
it would probably have been reduced by depreciation or other home market conditions.
4) The last factor would be low- or no-equity conditions that resulted
from low inflation and other economic conditions that can decrease the value of
property.
UNDERSTANDING WHAT EQUITY MEANS
AS A BUYING FACTOR
In order to understand the buying significance of equity you must
understand what it means. Equity is the difference between what real estate sells for
(market value), and the payoff amount of the loan to a lender on that property. In other
words, if you own a home with a market value or $100,000, but you owe the bank $99,000,
your equity is $1,000. In tens of thousands of cases, VA and FHA homes can be purchased
with little or no down payment because no equity has been built up.
TENS OF THOUSANDS OF HOMES
ARE AVAILABLE - INCLUDING YOURSS!
If you have been dreaming about owning your own home someday, Dream No
More! Right now at this very moment there are tens of thousands of homes for you to choose
from that can be purchased with no credit check and no down payment. or with a very modest
down payment.
Sounds incredible doesn't it? But remember, the only reason any seller
requires a down payment in the first place is usually to recover the equity in their home.
A small amount of equity requires a small down payment. No equity means no down payment!
DEAL WITH MOTIVATED SELLERS
Your objective as a smart buyer should always be to buy real estate
with little or nothing down. Even if a seller has equity, you can work out an arrangement
that is to your benefit. For example, a seller may agree to carry all the paper on the
transaction. This doesn't mean that the seller will receive no down payment where there is
an equity consideration. What it does mean is that you shouldn't have to come up with cold
cash out of your pocket.
Extending credit to customers is the way creditors make money. If you
convince them you are a good risk they will give you what you want. Basically, there are
two ways you can achieve that goal.
1) You can bypass the normal scoring methods that are used by
impressing the person processing your application that you are sincere reliable,
stable, and have the ability to make monthly payments on a loan or credit
card account.
2) You can tailor your answers to the application's questions and in
that manner fit into the right scoring mold of what a good credit risk is, according
to the formula they are using.
That doesn't mean you should lie on your application. It simply means
you should be aware that being compatible with certain stereotypes will work in your
favor. Remember, a creditor can still verify the information you list in an application.
Still, many people will twist the truth to put themselves in a favorable position. For
example:
1) Some applicants will list their parent's, a friend's, or a
relative's address as their own residence and indicate they have lived there for years,
knowing it probably won't be checked.
2) Provided an applicant has a friend or employer who will go along
with them, they can list a position and salary they don't really receive. Then when
the creditor calls to verify employment the friend will support what the applicant
has claimed to be true.
3) Another way applicants instantly increase their salary is to set up
their own corporation. After issuing themselves private stock with an inflated value,
they list the stock as part of their salary.
MORE HOT TIPS ON HOW YOU CAN
STACK THE ODDS IN YOUR FAVOR!
1) If you don't have a telephone get one installed. The alternative is
to make an arrangement with the telephone company and a friend or relative, to have your
name listed with their phone.
2) If you have more than one job, list the one that provides you with
the greatest income.
3) Add up your income from all sources and place the total in your
gross income listing. Be prepared to submit a supplement to your application if they want
to verify your income with your employer.
4) Many banks will have a list of "good" and "bad"
reasons for borrowing money. Unless you are applying for a secured loan, you don't have to
spend the money for the reason specified. "Good" reasons include home
improvement, education, loan to establish credit, medical treatment for you or your
family, and secured loans for a home, car, boat, and other properties.
"Bad" reasons include loans that create another obligation
such as that created when you borrow money for a down payment and then have two
payments to make; money to pay a fine or penalty; money to consolidate debts, unless you
are doing it to get lower interest rates; an unnecessary luxury item; money to finance
politics; and money that you will loan to someone else. Use a little common sense in
determining what type of loan a creditor may consider bad.
5) Banks use dependent figures to determine what your living costs are.
If you have more than two dependents you should indicate how they earn their own
way or are self-supporting.
6) If you don't own your own home, counteract this by showing how
stable you are. For example, even though you have only rented in a new location for a
relatively short time, you lived at your last residence for many years. You moved to
improve yourself in some way.
7) Even job changes can be counteracted if each change increased your
salary and improved your position.
8) Don't ever let a creditor guess as to whether or not you can afford
the extra obligation you are asking for. Make it obvious by the amount of your
income. If you have more income sources than just your salary, include those amounts.
ALWAYS BE PERSISTENT AND NEVER GIVE UP!
If you complete an application and are still rejected, the very first
thing you should do is be persistent and never give up. There are many reasons why a
person may be turned down for credit, but whatever the reason, you have a legal right to
ask a creditor what their reason was.
By knowing what some of the main reasons are for denying credit you can
put yourself in a position whereby you can make necessary adjustments and avoid negative
effects in advance. If you are turned down, you can then of course concentrate on those
points when you reapply.
When you are dealing with creditors you will know who is the
cooperative sort, and who is not. If an unsecured loan does not appear imminent, turn the
conversation to a secured loan. Then all you do is deposit an amount into savings account
to serve as collateral for the amount of credit you want to secure. In some cases the
creditor may take personal property as security. If you go to one creditor and it's clear
he has no imagination to deal, go to another who is willing.
CONSIDER ASKING SOMEONE YOU KNOW TO CO-SIGN
A co-signer is someone who generally has better credit than the person
he is co-signing for. He is also the person a creditor will go after first in the event
you do not pay off you debt. Why? Because the know that co-signers don't want their credit
ratings ruined and will quickly settle the obligation.
If you are trying to establish or rebuild credit, co-signers can help
you achieve that goal. Naturally you wouldn't need a co-signer every time you apply for
credit. After paying off one obligation with a co-signer, it should be much easier to
acquire more credit on your own.
Co-signers are usually friends or relatives. When you find someone
willing to help they should be offered some compensation agreeable to both of you. Your
application for credit will be approved primarily on the strength of your co-signer's
credit.
HOW TO GET A VISA OR MASTERCARD
The tips and techniques described in this report are meant to increase
the odds for anyone who is absolutely certain they cannot get a Visa/Mastercard through
normal channels. You should make every attempt to clean up your credit report by removing
negative items and replacing them with positive items. If you have no credit at all, open
an account at a local department store. After a few months apply for your bank card. If
you are rejected, find out why and correct the problem. If that doesn't work, cultivate a
relationship with your banker. Open other accounts that are easier to obtain. Increase
your income. Buy a home. Make yourself a better credit risk on your credit report. Ask a
friend or relative to co-sign. After paying off that debt, reapply on your own. Or, the
fastest and easiest way to open a Visa or Mastercard account in your own name, is through
a secured account.
SECURED CREDIT CARDS
Secured Visa and Mastercard bank cards are issued by savings and loan
associations throughout the U.S. The lender will ask you to open a savings account. The
funds placed into the savings account are frozen as long as there is an outstanding
balance on the credit card. The savings account acts as security against non-payment of
charges made against the credit card. Then, in the event a cardholder doesn't pay, funds
from the frozen account can be used to pay off the debt. This method completely reduces
any risk to the lender.
Requirements are often lowered by lending institutions that have this
program. So if you couldn't obtain a card through your regular bank, chances are you will
receive one through a secured credit card program without a credit check.
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