So you’ve found something shiny you must own. Maybe it’s a car or your first house. Maybe you want to own your own business. There’s just one problem. You don’t have the cash and your credit score is less than awesome.
You can still get what you want with planning.
In many ways, it’s easier to buy large ticket items like cars, homes, and businesses than smaller-priced items when your credit is bad.
Don’t believe it? Walk into the bank to get a loan to buy an iPhone. They will laugh you out the front door. Walk back in that same bank requesting a home loan and you may have a chance.
Large ticket items can be investments. Anyone who helps you get one has leverage over you, but if you’re savvy you’ll hold all the cards.
Here are five ways you’re gonna do it.
Get a Cosigner
If you have bad credit but good income, you might consider a cosigner. Perhaps you’ve just taken a good paying job, but need a car to get to work so you can keep that job.
For car loans, you can get a cosigner. Some banks loans also work this way. A cosigner vouches for you, that you will pay your debt or they will take responsibility for that debt.
It’s a risky move for the co-signer, which puts more pressure on you, but as long as you make your payments on time there’s no problem.
Buying a house is more than just shopping for curb appeal.
All professional real estate investors know that you may have to call 100 financial institutions to get one yes. It only takes one yes to make a loan happen. That means you may have to sit through 99 cases of no before that yes comes down the line.
If you aren’t getting the approval you want or the terms that suit your purchase, try-try-again.
Don’t listen to bad press either. They may tell you that you’ll never get a loan with your credit score, right before you make one more call and get approved.
Join a Credit Union
If you don’t already belong to a credit union (CU), shop around to see if there is one for which you can qualify. Credit Unions often partner with employers or organizations, where employees or members can join the CU.
The difference between a CU and a traditional bank is that credit union management reports to the members of the union, not shareholders. That puts more power in the hands of the members.
CUs will often approve loans where banks would not. They will offer interest rates that banks cannot, making it easier for you to take out bigger loans.
Depending what you want to purchase, a personal loan from a family member may be the best route.
Borrowing from friends or family can put pressure on those relationships, but if that money is going into a business or tools to grow a business, then you’re betting on yourself.
This is almost always a better gamble than betting on a team or stock.
Unless you’re a heartless jerk, you’ll be the first line of defense, making your loan work for you so you can pay it off as soon as possible.
Rent to Own
With large ticket items, like property or businesses for sale, sometimes the seller is so desperate to get out from under their investment they will work out an arrangement with you.
With a down payment, you may be able to make monthly payments until you’ve paid off the deal.
If it’s a home, you can count on the eventual value of the home to grow above the purchase price. The housing market, even in tough times, always climbs.
With patience, your home will be worth more. You can sell it for more than your agreement, pay off your debt, keep the amount over.
With a business, you may see some upside for making it more profitable or for selling the business at a higher price. In either case, as long as you make your payments on time, you’re good.
If your goal is just to acquisition more stuff in your life, then these steps may not serve your plan. On second thought, maybe they will.
When you invest smartly, then make money, paying off your debts, you will have more cash on hand for whatever you want. Eventually, you could acquisition more stuff.
First, make smart investments.