Will Refinance Your Home Affect Your Credit Score?
Refinancing a home can affect your credit score negatively if it becomes a negative factor used to determine a credit score. The most common factors come from hard inquiries, a new credit application, a missed payment on the current bank loan, and an increase in the credit utilization ratio. Lenders also look at your overall FICO score.
If you want to refinance, taking out that new loan may be worth it despite the impact on your credit report. If you stay consistent when and pay your bill on time, your credit score will improve quickly. Remember to keep your inquiries consistent and minimized so they are considered as one inquiry done within a short time frame. In the end, the decision comes down to need. If you need to refinance your home, then follow protocol and work to improve it, so ultimately this won’t affect your credit score. You may reap the benefits of remodeling and/or improving your home. And ultimately, refinancing your home can save your money, and allow you to keep up with your credit card bills and other debts. And this will help with improving, rather than affect your credit score overall.