Refinancing your home loan with a bad credit history

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Credit Card Applications » Research » Guides » Building Credit History » Refinancing your home loan with a bad credit history

Refinancing your home loan with a bad credit history


Updated: December 26, 2012

It is very difficult to secure a home loan with a bad credit history. Today, there are many options to help in securing a home loan with a bad credit history. As of now, the finance market has fallen so bad that people are not taking out loans anymore. Hence, it is very easy to get loans to finance your needs without incurring much interest costs. If you have debt, and are not finding conventional loans due to your bad credit history, you can go for loan refinancing schemes. If you have a bad credit score, you need to first sit down and contemplate whether or not a loan-refinancing scheme will help. If you decide that loan refinancing is the only way to escape out of the clutches of the debt cycle, you need to consult with a mortgage counselor who is experienced in lending to people with poor credit scores. Talking to a mortgage consultant is important to sort out your issues first. You need to consult with such an industry specialist in order to understand the intricacies of this market. Getting a conventional loan can be difficult because you do not have a good credit score, but if you go for loans that are securitized or given out by people who are acquainted with a bad credit history situation, you can get a better interest rate. When you talk to a home loan expert, ensure that you are absolutely honest about your current predicament and provide all your financial details. Only when you show all the financial moves that you have made, will you be able to get a good refinancing contract. Honesty is the best policy when it comes to getting help. Getting refinanced is not just about obtaining cash to pay off your outstanding debt. It`s about getting help to improve your credit score and thus your credit history. The debt refinancing experts will first collate all your debts into one single account. They will then calculate an interest rate that you will have to pay in order to get refinanced. This interest rate will definitely be lower than a credit card interest rate, but it will not be lesser than a conventional securitized loan. You can acquire lower rates on your loan by showing some kind of collateral, such as your home or car. After this, they will start looking at ways to improve your credit score. A bankruptcy filing will stay longer on your credit report than a late payment. Things like this have to be considered whenever you make a financial move. Never make haste as it will result in unforeseen consequences. You can take your own initiative and start doing little things that will improve your credit rating. You could open a new credit account and start making transactions on that account, but do remember to repay all the borrowed money immediately to avoid paying interest or avoid getting another tarnished credit report!

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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