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If you have received your free copy of your credit report and you have less than average credit, you may want the answer to the question, ‘Can you refinance with bad credit?’ If you need to lower your house payment, one of the ways to do so is to renegotiate the terms of your mortgage with your lender. The latest trouble in the housing industry has resulted in historically low interest rates and a lot of borrowers are now looking for ways to take advantage of these lower rates. If you have a loan on a vehicle and you want to refinance it, you must meet the criteria before you can do so. If you have poor credit you will find that fewer lenders will be willing to extend you a loan.

You can refinance with bad credit but you will need to shop for the best offer from a variety of lending sources. The instructions below are moderately easy to follow and when you have finished the steps you will know how to obtain a loan that is the most advantageous to you.

Step 1: Review the credit report that you obtained and look for the credit score. If you have less than 600 you may not be able to find a source of money until you have repaired your report and your score is higher. You will need to look for errors on the report and look for bills that you can pay so that your score will improve. If you can wait to take out another loan until you have raised your scores, you will have more options.

Step 2: You need to change your history by changing the way that you handle your finances. If you make payments in a timely manner and you pay off as much as possible, you will increase your credit score. You will not qualify for the better rates of interest until you raise your score into the 700’s, but you will at least get your foot in the door with most lenders.

Step 3: The lender will ask you why you are making application for a refinance. You may want to take out another loan to lower your interest rate or to shorten or lengthen your length of repayment schedule. You may want to use the money from the lower payment to pay off various debts.

Step 4: If you have someone who is willing to cosign the loan you will have a better chance of getting your application approved. The cosigner will have to meet the same qualifications of any other borrower because if you default on the note and you do not make the required payments the cosigner will be expected to pay them on your behalf.

Step 5: A loan broker deals with multiple financing sources and will know which lenders specialize in loans to those with poor credit. Do not use a payday loan company, also known as loan shark, if they have interest rates that are two to three times higher than normal rates. The broker will be able to get you quotes from honest lenders that will charge a slightly higher rate of interest, but will not be unreasonable. Get quotes from several lenders and choose the one that is most beneficial to you when you try to refinance with bad credit.