If you are one of the many Americans out there with bad credit, but want a mortgage refinance, you are probably scrutinizing your credit report and wondering what you can do to improve your situation and boost your credit. Sometimes it helps to know what not to do so that you don't make things worse.
First of all, if you have bad credit and are looking to refinance your mortgage, make sure that you've really evaluated your motives and understand whether or not getting a bad credit refinance mortgage will improve your situation. If it will make things worse in the long run then perhaps you need to reevaluate whether a bad credit home loan refinance is really the best thing for you. With that being said, here is a list of things you should avoid doing when looking at a bad credit refinance:
* Don't apply for a loan without first checking your credit report. There may be mistakes or old items that you can clear up to improve your score.
* Don't miss any payments on your current debts. Lenders want to see that you've been current on your mortgage and all other bills.
* Don't open new lines of credit. You don't want to add to your debt-to-income ratio and you don't want to over extend yourself.
* Don't pay off all your existing credit cards. Paying them off can send the wrong message to potential lenders and make matters worse.
* Don't pay off old collection accounts right away. Paying off an old account can bring it to the forefront of your credit report.
This list isn't arranged in order of importance. These are just important things to avoid when preparing to apply for a bad credit home loan refinance. To qualify for your bad credit mortgage refinance you want to do everything you can to make sure you qualify. Good luck.