How Refinancing Hurts Your Credit

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Does Refinancing Hurt Your Credit?

That’s a question many consumers ask before applying for this type of mortgage loan, but the answer isn’t as clear-cut as you might think. Let’s look at the facts to see if the refinancing does hurt your credit and whether you can be approved for refinancing with bad credit or no credit at all.

1: Home Refinancing Isn’t Bad for Your Credit

While it’s true that many people will be wary of taking out a loan because they don’t want to jeopardize their credit, refinancing may not hurt it as much as you think. Depending on how many times you’ve taken out loans and what kind of terms and interest rates you have, you might have a good or bad record when it comes to home equity. If you can get a better deal with more favorable terms with your refinance, go for it. Just make sure you understand all of your options before making any decisions. Refinancing isn’t always necessary—and if you don’t need it, then there’s no reason to do it.
Remember: Your credit score is important, but so is paying off your debt in full every month and having a good handle on your finances.

2: Effects of Home Refinancing on Your Credit Score

If you need to refinance your home, will it hurt your credit score? Will it affect whether or not you qualify for loans in the future? Yes, if done improperly. Keep reading to find out how to refinance without hurting your score.

3: Ways to Improve Home Refinancing Impacts on Your Credit

Here’s a question we often hear:

How does home refinancing hurt my credit?

While home refinances loans are considered low-risk debt, there are still instances where you can negatively impact your scores with any type of new loan. Refinancing can hurt your credit if you refinance at an interest rate higher than what you have currently or if you change mortgage products, like changing from an FHA loan to a conventional loan. If you make these changes while having several other recent transactions on your credit report, it could lower your score by as much as 50 points. This is because lenders will see that you have changed not only