Banks are not turning loose of money the way they used to when someone applies for a loan. In reality, they’re carefully examining people’s credit scores in order to determine who might or might not qualify for a loan. Although it’s possible to get loans with bad credit, it can be difficult. Here are some possible ways of getting a bad credit second mortgage loan.

If your credit is not excellent, and you would like to improve it, a second mortgage gives you the option to consolidate your credit card debts and other payments you might have into a single loan, with a single payment each month, and you won’t have to refinance your original mortgage. The amount that lenders can loan on a second mortgage usually does not exceed the amount of equity the owner has in the home.

This is not like a home equity credit line; the second mortgage is just a one time loan that has a scheduled payment amount each month. Second mortgages can be taken with the same lender as the original mortgage or with a different lender. How easy it is to get money and how much money can be loaned are dependent upon the amount of equity in the home the owner has and his her credit report.

Most of the bad credit mortgage lenders will look at the most recent two to three years of your credit report before they make a decision. The two most vital factors that determine who can obtain a bad credit second mortgage are whether they make payments on time, and the income to debt ratio.

Another serious factor that is considered is what you intend to do with the money if the loan is approved. If your intention is to pay off high interest debts and consolidate things to make payments easier to handle, rather than invest in other projects or plans, your chances for approval of a bad credit loan go up.

When applying for a bad credit second mortgage, it is important to have some information for the loan officer in hand before walking into his office. It’s beneficial to bring hard copies of your credit report with any inconsistencies and notes explaining what you will do to remedy them. If there are no errors on the report, a statement of how you are making improvements to your credit score should be attached to the loan application.

Being upfront with the loan officer about your current situation and indebtedness is the best thing you can do. It’s also necessary to include your total income in the figures in order to figure out your debt to income ratio. The bank does not want to loan money that will not be repaid, forcing them to foreclose. So it’s up to you to show exactly why the money is needed and how you plan to use it.

It’s not easy to get a bad credit second mortgage, but they can be the best bet for getting an improved credit score in this difficult economy. If you combine several high interest rate debts into a single lower interest rate loan, without having to refinance your original mortgage, you can improve those scores quickly and legally.

Jill is an avid blogger that loves to blog about subjects like second mortgage with bad credit score and second mortgage with bad credit score on her site.