Michael Holigan: Joe and Beth Miller had some credit problems a few years ago and thought they would never qualify for a loan. They were delinquent on some bills and they were late paying on others. A mortgage broker worked with them to get their finances back in shape.
Joe Miller: We had some credit problems. He asked us to pay those to current, where we had a past due balance of zero. And as long as we had a past due balance of zero, he would find us somebody...he would find us some lender who would put the money up for the mortgage.
M.H.: If you're a person who's had financial problems in the past, don't give up. Lenders understand that you're human, and that mistakes are made. What they want you to do is get your finances back in order. First, get copies of your credit report an d contest any incorrect information. Next, prepare a letter to explain late payments. And pay off any bad debt you have. Be sure to get written proof from creditors that problems have been corrected. There's a big difference between people who are bad credit risks and people who've had financial problems in the past. A lender has to decide which category you fall into. There are three main questions that lenders will be asking. One, what happened? For example, did you over extend yourself, lose your job, have a medical emergency. Question two, what did you do about it? Did you pay back what you owe? Were you timely in your payments? And three, why will it never happen again? Are you back on your feet? Did you make the right changes in your life? To qualify for a loan, the Millers rearranged their priorities as well as their spending habits.
J.M.: Well, we had to pay it up. We had to pay everything up.
Beth Miller: It was worth it, but it was hard. It was real hard, it was real hard.
J.M.: We saved some money, we just budgeted in order to save up enough money to pay any past due balances that we had on our credit.
M.H.: The bottom line is lenders realize that your human and mistakes are made. What matters to them is what did you do to overcome and correct those mistakes.
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Episode 39 1996 - 97 Season
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