There are several different factors that your lender considers when you attempt to refinance your home. The most common reason most borrowers are denied, and the most overlooked, is credit. Over 90% of credit reports contain at least one error! One error on your credit report can make a significant difference to the interest rate you are quoted, or more importantly, the reason you are denied.
The internet is filled with companies offering services to improve your credit scores. These services can be extremely expensive, and often times not very ethical. Most companies fail to tell you is you could take the same steps to improve your credit, and you could do it for free!
The first step is to go to annualcreditreport.com and order a copy of your credit report from all three bureaus. You can order a copy of your report online from Equifax, Experian, and Transunion, and can have access to those reports instantly. Once you receive your copy of your report, you have the ability to dispute everything and anything on your report. You also have the ability to attach proof of erroneous information on your report, and submit the information to the depositories. By providing the proof, your credit report will remove the incorrect information in 30 to 45 days. This is the same thing an expensive credit repair agency will do for you, but it doesn't cost you a dime.
You can also dispute anything on your report without proof. If you dispute the item in question, the credit report will contact the company and inform them that you are disputing your information. The creditor has 30 days to respond to the request, or the item must be removed from your report. Many organizations will not even respond to the request, so the trade line is removed. You have the same ability to do this, and it won't cost you a fortune. You can do it all for free!
There is a way to fix errors on your credit report quickly, but it can only be done by an approved mortgage lender. This expedited process is only offered by a small portion of the lending industry, but can save you thousands on your next refinance. An approved mortgage professional can expedite your request and have the erroneous information removed from your report within 3 days. In addition, the credit reporting agency will IMMEDIATELY update your credit score. This can be vital for borrowers with marginal credit scores! I personally have helped a client increase their scores by 110 points in less than a week!