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Bad Credit Home Equity LoansHomeowners with credit problems continue to come to Smart Home Equity when they need a home equity loan but they have bad credit. We remain an online authority for home equity loan solutions for borrowers with poor credit scores. Our bad credit equity loans allow borrowers to consolidate bills and lower the monthly payments with a fixed interest rate. Our sub-prime home equity loans are great for reducing high rate interest and saving money.
When Should I Refinance and Get a Home Equity Loan if I Have Low Credit Scores? If you have low credit scores, the answer to the question of when to refinance your equity loan depends on your circumstances. If you plan to refinance, the first thing you should do is to first get a copy of your credit report from each of the three credit reporting agencies: Experian, Equifax and Trans Union. You may find that errors may be contributing to your low scores, and correcting them could raise your scores enough to get a better rate. After correcting your credit report, go to myfico.com/12 to get your current scores and all 12 negative reasons lenders see. This will help you determine where you stand and what you can do to start improving your scores. This information will also help you negotiate a loan with a mortgage lender. If your first mortgage has good interest rates and terms and you still have poor credit score, a bad credit refinance would probably not be in your best interest. You should instead consider a bad credit home equity loan (second mortgage) because a poor credit refinance will raise your interest rates above what you are currently paying, and cost you a lot more than a sub-prime second mortgage. Non-conforming loans, like bad credit mortgage refinancing and sub-prime 2nd mortgages, always carry higher interest rates because there is more risk to the lender. Finding a home equity mortgage lender that works with non-prime credit isn't as difficult as you might think. Just get on the Internet and run a search for "bad credit 2nd mortgage" or similar terms. Once you get your loan, pay off your debts and don't use the cards, so you don't get further into debt. But, keep the credit accounts open because length of credit history, the size of debt in relationship to your available credit and what different types of credit you have are three major factors in determining your score. Closing your accounts will make your credit history appear shorter, reduce the different types of credit you have and eliminate those credit limits you worked so hard to get, and this will lower your scores. Keep paying your new loan and other bills on time. According to Fair Isaac and Company, by paying your bills on time for 6 months you could raise your FICO almost 20 points. Within about 2 years, your scores should be high enough to qualify for a refinance at much lower rates and much better terms.
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