Refinancing With Credit Under 500 - If you are in need of refinancing and your credit score is under 500 then you have very limited options. The vast majority of home owners who end up refinancing with a credit score under 500 use hard money lenders. Hard money lenders are equity driven and pay no attention to a credit score under 500 when refinancing.
Hard money lenders look at the value of the property and the loan amount. With loan to value ratios of 70% or less, hard money lenders can be a viable option to refinance as they do not look at credit for qualification.
Another option is Freddie Mac. DU and AU systems are typically driven by payment history and liquid assets (typically 6+ months is good).
If your credit score is under 500 and you are wanting/needing to refinance you may want to consider working with a credit repair company to improve your credit scores so that you are able to refinance for a better rate. A credit repair company can sometimes improve your score enough to help you qualify for a refinance within as little as 30 days. The fee that you pay them to work on your credit and improve your scores will be well worth it if you can improve your credit enough to help you refinance and/or qualify for a much better rate.
If you are over 62 and have equity in your home you may qualify for a reverse mortgage. Reverse mortgages do not look at income or credit and can be a solution for borrowers with credit under 500.
In some isolated instances, you may qualify for FHA or Fannie Mae type financing if you have decent equity and a good 12 month mortgage history. Sometimes, Fannie Mae will approve a loan through there automated system even if there are some recent mortgage lates and a low credit score.
How Can I get My Credit Score Above 500 - Many borrowers with credit scores under 500 run into the same problem, no one will loan money to them. Whether you need a mortgage, car loan or just a personal loan a credit score that s not above 500 can be a deal killer. Luckily there are ways to increase your credit score to a level above 500.
One issue that you may be facing is not having enough credit. Applying for a secured credit card with a local bank or credit union is a relatively easy way to add a tradeline to your report and get your score above 500. A secured credit card, allows you to pre-pay a set amount of money on a card, and allows you to use the card just like any other credit card.
Be realistic about your expenses and try to create a workable budget. Getting a secured credit card and establishing a clean credit history on it will help you re-establish gfood credit.
Some of the common advice given to people pursuing credit repair does not apply to borrowers whose scores are below 500. In particular, borrowers may find that simply requesting increased credit lines on their credit cards and other "revolving" debt tradelines will not be effective, as the credit card companies will also review the borrower's credit in making a decision on whether or not to raise the limit.
People who pay thier bills on time usually have good credit. Something about the simplicity of it eludes so many, but at the end of the day, paying your bills really works.
Assuming there are no errors on your credit report. You should come up with a budget to payoff outstanding debts while making all other payments on time. Also, try to negotiate balances down to pay them off sooner. These steps over time this will raise your credit score.
Let's face it "BAD THINGS HAPPEN TO GOOD PEOPLE". This is why many consumers fall behind on their bills and are faced with credit scores that are very low or possibly even below 500. Whether it is an illness that has caused you to miss work, outrageous medical bills, being dropped by your insurance company, losing your job, a family member with a life threatening illness, or whatever the case may be, these items are a way of life and many people throughout the nation must deal with these everyday issues all of the time. There are things you can do though to hopefully get you back on the right track with your credit score as soon as your financial situation begins to improve. You can try to improve your credit on your own by rebuilding your credit, you can try to negotiate with debt collectors to settle for less than full balances, you can consider debt management companies or you can consider at last resort filing bankruptcy.
When rebuilding your credit, the most important thing to do when you have a low credit score that is below 500 is to check your credit report for errors. Any errors that you find in your credit report, you need to dispute with the credit bureaus to get them removed. Next you need to re-establish a positive credit history. Any credit cards that you have that are still open you need to start making on time payments. Any installment loans that you have such as an auto loan or a mortgage loan you also need to begin to make all of your payments on time. If you no longer have any open accounts that you can make payments to then you will need to obtain a couple of secured credit cards in order to reestablish your credit history. Finally, with time and taking care of the above items you will be able to get your credit score above 500.