With interest rates at historic lows, many people are taking advantage by refinancing their mortgages. However, a considerable number of consumers haven't been able to do so due to not having strong enough credit or because lending restrictions are too tight, a new report indicates.
According to the Federal Reserve, approximately 2.3 million homeowners could have refinanced their mortgages in 2010 but were denied because of credit issues. Some of the problems involved owing more on their current mortgage than their home was worth and tighter lending practices, many of which were enacted after the housing market collapsed in 2008.
Overall, the Fed said about 4.5 million refinancing applications were approved last year. In a healthy market, that figure would be 34 percent higher.
While bad credit may prevent some consumers from being able to refinance their properties, unfairly reported credit report items may result in lower credit scores, making it harder for individuals to take advantage of reasonable interest rates. By keeping track of their credit reports, consumers can make sure credit scores are accurately represented.