Financing Bad Credit

| January 3, 2012

Let’s face it, bad credit happens, and for those of us who suffer from it, financing bad credit can be a traumatic experience. This becomes especially true when one realizes exactly what skeletons need to come out of the closet before financing bad credit can even begin to happen. Fortunately, we can provide you with a quality guide to financing bad credit and reveal a few tips for those that may be looking to refinance their mortgage, especially, but might have had some slip ups with the credit police in the past.

Now, before I go any further, don’t worry, there aren’t really any credit police, otherwise most of us would be in jail. The truth is, that the closest thing to a credit policing agency is consumer reporting agencies. You might know them from their names, Equifax, Experian, or Transunion. These are all names for different agencies that can be called or written to by companies to whom you owe unpaid or delinquent debt. When financing bad credit, especially a home mortgage, your first step is obtaining a free credit report from these companies to determine what debts can be cleared easily. Don’t worry, you won’t need a coupon to get a free credit report, one is obtainable-per service, i.e. Experian-per year, by law. Once you can review your credit reports, determine the low debt amounts that seems to be bringing you down, and structure a payment plan, or pay them off in full. Chances are that you can contact the company to whom you are in debt to and get the total amount lowered, especially if you plan to pay off the full amount.

Once you’ve removed all the debts that you reasonably can, being able to tackle the mortgage refinance will require that a few things be understood. Financing bad credit usually entails a much higher interest rate, and this should be clearly weighed against the need for a refinance. Be sure that you need the refinance, otherwise wait, as a 30 year mortgage with a higher interest rate than when the initial mortgage was taken could be disastrous to repay.

If you cannot get a refinance offer because of your bad credit, your last hope will be to get a cosigner on board that has substantially better, or even adequate, credit. This person should only be someone you trust, as the house will be in both of your names and subject to property disputes if issues should arise.

Category: Bad Credit Loan

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