Clean Up Your Credit

If you are in the market for bad credit home refinancing, your credit could probably use some sprucing up. Here are a few ways you can clean up your credit before you refinance.

• Check your credit reports. Before you apply for bad credit home refinancing or any other loan, you should check your credit reports from all three major credit bureaus. Review your reports for accuracy and any potential signs of identity theft. Almost 80% of credit reports contain errors-errors that might be unnecessarily dragging down your credit score. Dispute any questionable or erroneous items.
• Don't apply for a lot of new credit before you apply for a loan. As the time comes to apply for your bad credit home refinancing loan, you want to avoid applying for a lot of new credit. This will lower your score and signal desperation to potential lenders. You want to keep these kinds of inquiries to a minimum on your credit report.
• Don't close credit card accounts that you don't use. Don't close any inactive credit card accounts around the time you apply for a bad credit refinancing loan. This will raise your balance-to-limit ratio, which hurts your score. You want to keep your credit capacity as high as possible and your balances as low as possible. Basically, creditors want to see that you have a lot of credit that you're not using.
• Be diligent about paying on time around the time you apply. As you prepare to apply for a bad credit home refinancing loan, you want to make sure you are especially diligent about paying your bills on time. A late payment from seven years ago will not damage your credit score as much as a late payment from last month. Make sure you are current and on time with all of your accounts.
• Give it time. If you can afford to wait to apply for bad credit home refinancing, you would be surprised how much you can improve your credit in a modest amount of time. Consistently paying on time and paying down balances can improve your credit situation dramatically.