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DEMYSTIFYING CREDIT OFFERS:

1.One of the first things to look for on any offer is your status"are you pre-approved or pre-qualified? This distinction is significant, because it determines whether the offer you are looking at is guaranteed or conditional. Pre-approved offers are bound by law to grant you a loan or line of credit with the terms stated in the promotion, provided your pre-screen conditions do not change. Pre-qualified offers are little more than invitations to apply, meaning that terms and conditions will be based on a number of factors, including income and credit rating.

2.Carefully examine the terms. For example, if a line offers a great introductory rate, it is important to have a clear understanding of how long the rate applies and what the rate will be when the introductory period closes. Other terms to look for include repayment period, fees and prepayment penalties. For credit cards that offer zero percent APR for balance transfers, be mindful that a late payment can trigger the rate to around 20 percent, and that new purchases will carry interest and may not be able to be paid down until the amount of the balance transfer is paid of in its entirety.

3.Consider the reputation and accessibility of the lender. Do they have local offices and people you can speak with who know the needs of people within your region? If you have any questions regarding a company's credibility, you can contact the Better Business Bureau, www.bbb.org.

Regardless of whether the loan or line you are interested in is a preapproved or prequalified, you still need to go through the application process. Items you will need to complete your application include:

current income;

pay stubs;

W-2 or two years of tax returns (if self-employed);

current expenses; and

the approximate value of your house (if you are interested in applying for either a home equity loan or home equity line of credit)

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