Bad Credit Refinancing
With the recent increase in the number of home foreclosures numerous lenders
are more leery of refinancing individuals who are classified and have a history
of bad credit. How can you tell as a consumer if you fit into this category?
Listed below are major indicators to determine if you have bad credit:
A FICO Score of 620 or lower
Within the past 12 months, you have had two or more 30-day delinquencies
If you have had a foreclosure or a charge-off within the last 12 months
If you have filed bankruptcy in the past 60 months or have been declared
as bankrupt
If you’re debt to income ratio is 50% or higher- this translates into
your income not covering the debt expenses incurred
It is imperative that you know your credit score prior to making a decision
on applying for a bad credit refinance on other loans you have incurred. The
other focal points; the amount of the loan, credit reputation that you
personally have (your credit score and history), the collateral you have to
place for the loan (this should be equal to the loan amount you are requesting),
and the most important; your ability to pay back the debt.
Seek lenders who process their loans in-house vs. outsourcing. Seek the
expertise of experienced loan counselors who can offer the best advice. You
should definitely "shop around" for the best rates including the loan terms and
conditions. Remember the longer you "shop" the better your chance is in finding
the ideal bad credit refinance package.
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