Having bad credit is certainly bad news, but it is not the end of the world yet. There is still a possibility that you can improve your bad credit score by cleaning up the mess you created. If you want to refinance your home mortgage with bad credit, you will have to improve your credit score a bit.
Some people who are eager to improve their credit score quickly resort to certain actions that may backfire. Below are some of the things that should be avoided when you want to improve your credit score.
Do Not Close a Bank Account
If you have a bad credit score and you want to get a refinance on your home mortgage, never close a bank account to remove it from your report. This tactic does not work well with lenders. It will be very clear that you are trying to hide something.
Do Not Open Too Many Accounts
Some of us, in order to improve our credit score, open too many accounts in a very short span of time. This is certainly not a good strategy and will expose your intentions behind this act. Having too many accounts can cause suspicion and lenders would be hesitant about giving you a loan.
Do Not Shop Around for Lower Interest Rates
Shopping around too much for a lower interest rate can affect your credit score. Whenever you apply for credit, lenders first have a look at your credit score, so it is better not to shop around too much.
When you want to refinance home mortgage with bad credit, you will have to pay a higher interest for it as lenders would see you as a risky borrower and would not want to risk their money. Also, your desperate attempts to improve your credit score can backfire, so try to avoid them.