Getting Rid of Bad FICO Credit Scores


A bad credit score or what we call FICO score can be a huge obstacle when we decide to buy a new car, purchase a new home or shop for the best auto insurance. Since the economic downturn more and more people are finding themselves a bad credit situations. One option available to current home owners is what we call a “bad credit” refinance. By refinancing and paying off credit card debt and other financial obligations can relieve some of the stress associated with financial problems. This can be a positive alternative for those that are starting to get strapped with their financial dilemmas.

If a consumer continues to find themselves in a “hole” that they can’t seem to dig their way out of, a “bad credit” refinance might be the best alternative to start anew. If it’s possible to get out of the hole financially or repair your credit by removing incorrect information you might want to take this approach at first. If all else fails, then a “bad credit” refinance would be your best choice. Refinancing your mortgage has many benefits such as lowering your overall debt or debt ratio, writing off the interest for tax purposes with your new mortgage payment and eliminating the calls your receive from credit institutions for past due payments. By staying current with your mortgage payments will increase your credit score and allow you more financial freedom.

You mostly likely want to consider this “bad credit” refinance if it will lower your monthly mortgage payments and allow you to put away more in savings or have the extra money to pay off some of your debt faster. This is usually the main reason why we refinance even if we have a good credit history. With the new Federal Law you will have time to review your Good Faith Estimate and Truth in Lending statement from the lender of your choice. These two documents will show you exactly what your interest rate is and what your monthly payments will be. If you uncomfortable after you review these documents then consider going to another source to do your refinance.

Several people over the years have refinanced their homes with the intent of paying off credit cards and other debt obligations. Soon thereafter they are applying for credit cards or loans and find themselves right back in the same position before they refinanced. Be careful not to fall into this “trap” again. Since this is a very important financial decision, you want to plan and be prepared before making this financial commitment, otherwise you will be defeating your purpose and possibly end up in a worse financial position than before.

Whether you are applying for a “bad credit” refinance or anytime you are making an important financial decision, always weigh the pros and cons. Don’t allow yourself or someone else to rush you through the process. Making “smart” financial decisions when refinancing your mortgage will benefit your credit score and help you overcome financial obstacles later in life.

Getting Rid of Bad FICO Credit Scores

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