By Peter Kirkham
Bad credit refinancing helps many of us to get around the obstacles that life sometimes drops in front of us.
Like taking out a brand new loan, refinancing is difficult to do if you have bad credit. Since the banks will see you as a high-risk client, they're less likely to allow you to refinance, but there are several ways that you can make this work, anyway.
First off, you can work to improve your credit by a few points before applying to refinance, and you can also refinance if you have built up a lot of equity in your home or car already. Refinancing can also be the thing that helps you improve your credit, since it can significantly lower your monthly payments and your interest rate.
While you can't expect to improve your credit score overnight, you can go from bad to average within a matter of a couple of months. It's easier to get refinancing loans with average credit than with bad credit, so this can be a good way to go. First off, check your credit reports - all three of them - to insure that they aren't missing any accounts and that they don't have any mistakes on them.
A single mistake can cost you several points in your credit score.
Next, you'll want to get your debt to credit ratio improved. The quickest way to do this is to apply for a higher credit limit, and you can also do this by paying down your revolving debt - especially high interest credit cards - quickly. If you're in a real crunch, this can be difficult, but putting in the extra effort for a few months can really improve your chances or getting bad credit refinancing with decent terms and interest rates.
If you're refinancing, it means that you already own a home or a car.
The more money you have already invested in this item, the more likely you are to get good terms for your bad credit refinancing. If you're upside down on the item, which means that you owe more money on it than it's currently worth, a common situation for car and home owners today, you may have to pay it down a little before you can refinance it.
Dumping all your extra money for two or three months into your car or mortgage payment can help you do this, although the process will be easier with a car than with a home.
Finally, shop around for bad credit refinancing loans.
Some banks and lending companies are very conservative and won't take risks on those with less than average credit, but other companies are more willing to take risks. You may have the best luck if you actually apply for the loan in person, since the representative you talk to will probably have some pull on whether or not you get a loan.
Plus, applying in person may give you the ability to hash out your situation with another person and to figure out what the best option for your financial situation would be. If you can, go into two or three banks within the space of a week to talk about refinancing options.
To discover more information about bad credit assistance have a look at Refinancing Help.
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Bad Credit Refinancing, There's Always Someone to Help You
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