I Need Help Refinancing My Home With Bad Credit

A low credit score and bad credit can make it difficult for you to get approval on a loan, even when it comes to refinancing your home. Refinancing can help lower your interest and monthly payments, which could help you keep your home during difficult financial times. Though many lenders hesitate when it comes to refinancing a mortgage loan when you have bad credit, you do have a number of options available to you.

Instructions

1

Send for a free copy of your credit report from one of the three approved credit reporting companies: Experian, Equifax and TransUnion (see Resources). Each year, you are entitled to one free copy of your credit report from each of the three companies.

2

Review your credit report for mistakes and balances that can be settled and amend them. Taking action to repair your bad credit is a sign to lenders that you are working to improve your standing and that you take your credit seriously. In many cases, paying down high-balance credit cards can help improve your credit score within just 30 days.

3

Attend consumer credit counseling. This can help get your credit back on track if you are having a hard time cleaning up your bad credit on your own. This process could take months and will not improve your credit score overnight. On the other hand, when a refinance company sees you are working with a credit counselor, it could work against you, rather than in your favor, as the lender will consider you at high risk for default.

4

Shop around with different mortgage refinance companies and compare their rates. When talking to refinance companies, you can determine whether or not they are willing to refinance with you, what their terms and rates will be and then compare notes from each of the lenders. Choose the lowest rate available to you.

5

Ask a close friend or relative with good credit to co-sign on the loan. Sometimes your bad credit may get in the way of refinancing, but if you have someone you trust with a good credit score who is willing to co-sign on the loan, you may be able to not only get approved, but also obtain a lower interest rate.