Sure, there is every chance that you could tide over the difficult situation. It feels bad to have a credit score below 500 and to be denied a badly needed loan. There are still options left for you if you look around. Still there may be plus points in your favor that you can utilize for getting a loan. The normal mortgage refinance may not be available to you but if you have enough equity built into your house you may well meet the criteria for what is known as a hard equity loan. If you have an automobile loan for which you would have paid a down payment of 30% to 40% of the value of the car that may also speak up in your favor.
It is tough to get adjusted with the fact that you will not be treated on par with people with a good credit score and bankers think that you will probably be not able to repay at all. They also look into what you have to pay every month in the context of your disposable income and naturally arrive at a pessimistic conclusion. But the silver lining here is the amount that you have already paid as installments and has added up as equity in your favor. This will enable you to get a loan although the interest rates would be a bit high. That you have a credit score below 500 will not matter now. Some times if you can provide enough records to show that you have a larger income now than before that could easily take care of your monthly outgo your credit score of 500 will be ignored. You may have to come up with larger down payments but you will get the loan, no doubt.
The great advantage in getting such a loan when your credit score is languishing at sub 500 levels is that your immediate financial requirements are taken care of and you will be able to lead a normal life. When you start paying this loan without default your credit score improves automatically. This is the primary advantage of taking a high interest loan and sincerely paying the monthly installments. You need not stay at the bottom for any longer. Soon things will turn rosy and as your credit score improves over two years you will be eligible for loans at attractive interests. You can then obtain such low interest refinance and pay off your high interest obligations at one go that will again boost your credit score. With more disposable income on your hand and a lesser monthly outgo your credit score starts shooting up. Certainly, there is some truth in the saying that there is a beginning in every end.
Among other things you can do to improve your credit score from the abysmal level of 500 is to pay off all your monthly dues on your personal loans and credit cards in time. You can also take a FHA refinance loan that has the backing of the government that does not take into account your credit score. Your overall credit worthiness will be considered and if you can prove that you will behave responsibly you will be considered eligible.