The 6-Step To Do List Before You Apply For Refinancing Loan

Refinancing with a lower credit score poses unique challenges, but you can successfully navigate this process with strategic planning and informed decisions. Here’s a comprehensive guide to help you prepare for refinancing with bad credit:

Step 1: Assess Your Credit Score

To get an updated report on your credit score, obtain a copy of your credit report from major credit reporting agencies such as Equifax or Experian. Check the report carefully and note down possible errors you can rightfully dispute to improve your score. 

Step 2: Improve Your Credit Rating

If your credit score is less than optimal, you can take proactive steps to enhance it, such as reducing existing debt, refraining from taking on new debt, and ensuring timely payment of all bills and obligations. A good start can be by paying off your credit card balances and consistently making on-time payments, which will gradually increase your credit score.

Step 3: Research Lenders

Not all financial institutions will consider applications from individuals with poor credit histories. However, some lenders specialise in refinancing options for borrowers with lower credit scores. Conduct thorough research to identify these lenders and prioritise your application efforts with these select groups to improve your chances. 

Step 4: Compile Necessary Documentation

Gather all essential documentation, including proof of income, employment history, current mortgage statements, and any other financial records that support your refinancing application. Try to organise your papers for easy reference and access; these can demonstrate your financial capability to repay your loan despite your current credit status.

Step 5: Consider a Co-Signer

If feasible, explore including a co-signer with a strong credit history. A co-signer can help mitigate the perceived risk for lenders, potentially increasing your chances of approval and securing more favourable loan terms. A co-signer with excellent credit can improve your approval chances and even help you secure a lower interest rate, because lenders are assured the loan repayment default risk is lower.

Step 6: Seek Professional Guidance

Consulting with a financial advisor or mortgage broker specialising in assisting individuals with poor credit can provide valuable insights and guidance throughout the refinancing application process. For instance, a mortgage broker like Tiger Finance will help you understand your options and match you with the perfect lender willing to work with you despite your low credit score.

Remember, each proactive step you take towards enhancing your financial profile can significantly improve your chances of refinancing success, even with a less-than-ideal credit score.

At Tiger Finance, we always guide you every step of the way with loan experts who are well-versed in the current situation in the world of financing. You can get a free consultation with our in-house financing expert without obligation to give you the most accurate picture of your loan situation today.

Contact Tiger Finance today so that we can help you begin your journey to securing the hassle-free loan product you need.