Refinancing your home mortgage is one of the best ways to fix bad credit. Since your credit history is not good, it will be hard to find a lender for your home mortgage. Don't bother with banks and other financial institutions, because they probably won't take your home mortgage. So how do we find someone who will?
Well, subprime lenders are the answer to that. People with bad credit histories can get loans from most subprime lenders. But keep in mind that it varies from lender to lender, and you may have to visit more than one to find one that does.
You can find subprime lenders on the Internet, through your friends, or in the local business directory. Some lenders know other lenders and can put you in touch with them on your behalf.
Since refinancing your home mortgage is a high risk for subprime lenders, you may need to find a few before you find one that will give you the loan. Subprime lenders also have their own approval process, which isn't too different from what banks and other financial institutions do. When deciding if you qualify for the loan, they look at your credit history, assets, gross income, current debts, and other things. However, they have a higher threshold than banks and other financial institutions.
They usually charge higher interest rates because they are taking on more risk. Even though you may pay more, I think the benefits of fixing your bad credit outweigh the downsides of paying more in interest.
Keep in mind that this is only a short-term fix because you still have to pay your monthly refinance on time. If you don't, things will get worse for you. I think you should refinance your home mortgage for more than you owe so that you can pay off your credit card debts, bills, etc. with the extra money. That will also help you fix your credit.
In the end, this method of fixing your credit still requires you to be better with your money. I would suggest setting up the payments to refinance to come out of your salary every month. This way, a portion of your paycheck goes toward paying off the refinance loan before you even get the money. Most banks will set it up for you for free, or you can do it through online banking.
Keep in mind that the only way to fix your bad credit is to be responsible with your money.
