{"id":159562,"date":"2021-01-21T13:03:00","date_gmt":"2021-01-21T10:03:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/nerdwallet-this-is-what-refinancing-a-mortgage-can-do-to-your-credit-score\/"},"modified":"2021-01-21T13:03:00","modified_gmt":"2021-01-21T10:03:00","slug":"nerdwallet-this-is-what-refinancing-a-mortgage-can-do-to-your-credit-score","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/nerdwallet-this-is-what-refinancing-a-mortgage-can-do-to-your-credit-score\/","title":{"rendered":"#NerdWallet: This is what refinancing a mortgage can do to your credit score"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a512feda9d0b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a512feda9d0b\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/nerdwallet-this-is-what-refinancing-a-mortgage-can-do-to-your-credit-score\/#The_good_news_is_that_its_likely_temporary\" >The good news is that it\u2019s likely temporary<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/nerdwallet-this-is-what-refinancing-a-mortgage-can-do-to-your-credit-score\/#A_lower_rate_%E2%80%A6_and_a_lower_credit_score_temporarily\" >A lower rate \u2026 and a lower credit score, temporarily<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/nerdwallet-this-is-what-refinancing-a-mortgage-can-do-to-your-credit-score\/#3_ways_to_minimize_the_effects_on_your_credit\" >3 ways to minimize the effects on your credit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/nerdwallet-this-is-what-refinancing-a-mortgage-can-do-to-your-credit-score\/#The_good_outweighs_the_bad\" >The good outweighs the bad<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/nerdwallet-this-is-what-refinancing-a-mortgage-can-do-to-your-credit-score\/#Erin_Hurd\" >Erin Hurd<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#NerdWallet: This is what refinancing a mortgage can do to your credit score<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"The_good_news_is_that_its_likely_temporary\"><\/span>\n  The good news is that it\u2019s likely temporary<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000132378\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       <em>This <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/finance\/mortgage-refi-affect-credit-score?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=866458\" class=\"icon none\">article<\/a> is reprinted by permission from <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/blog\/?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\"><em>NerdWallet<\/em><\/a><em>.\u00a0<\/em><\/p>\n<p> When interest rates started to drop in the spring of 2020, my husband and I took notice. We watched as the rates on both fixed-rate and adjustable-rate mortgages continued to slide to historic lows. As more friends gushed about how much they\u2019d lowered their rates and monthly payments, we decided to look into refinancing.<\/p>\n<div class=\"paywall\">\n       A mortgage refinance is when you take out a new loan to replace your existing loan. The most common reason to do this \u2014 especially now with rock-bottom rates \u2014 is to lower your monthly payment.<\/p>\n<p>Locking in a lower interest rate by refinancing can save some serious cash in your monthly budget. And those savings add up to a substantial sum over time. According to Freddie Mac,<br \/>\n        FMCC,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/202741363\/delayed\" class=\"negative\">-2.37%<\/bg-quote><br \/>\n       borrowers who refinanced to lower their rate or extend the term of their loan saved an average of nearly $2,300 in annual interest during the first quarter of 2020.<\/p>\n<p>But there could be an unintended downside to refinancing your mortgage: Your credit score might take a hit. The good <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>, though, is that the dip is temporary and your score should bounce back. Here\u2019s what I noticed when I\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/mortgages\/should-i-refinance-my-mortgage?utm_campaign=ct_prod&amp;utm_content=866458&amp;utm_medium=wire&amp;utm_source=syndication&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\">refinanced my mortgage<\/a>.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"A_lower_rate_%E2%80%A6_and_a_lower_credit_score_temporarily\"><\/span><strong>A lower rate \u2026 and a lower credit score, temporarily<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>When we started shopping around for rates on a new mortgage \u2014 it\u2019s best to get a few quotes so you know your options \u2014 we knew that the creditors would check our credit reports. We knew that this would show up as a \u201chard inquiry\u201d on our reports, which would likely ding our credit scores by a few points.<\/p>\n<p>We learned that even if a few different creditors pull your reports while you\u2019re interest rate shopping,\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/blog\/finance\/rate-shopping-credit-score-loan-mortgage-vehicle-studen\/?utm_campaign=ct_prod&amp;utm_content=866458&amp;utm_medium=wire&amp;utm_source=syndication&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\">multiple inquiries while rate shopping<\/a>\u00a0over a short time frame will usually be lumped together into just one inquiry. That way, the effects on your score are minimized.<\/p>\n<p>After locking in a low rate and signing a fat stack of papers, we were the proud owners of a brand-new mortgage. We traded our 30-year mortgage for a 15-year loan at a much lower interest rate, and successfully slashed the number of years we\u2019ll be making payments.\u00a0I was ecstatic about the money we\u2019d save. But I wasn\u2019t quite as excited about what h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ened to my credit score.<\/p>\n<p>About a month after closing, I noticed that my FICO<br \/>\n        FICO,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/200175312\/composite\" class=\"positive\">+4.00%<\/bg-quote><br \/>\n       score dropped more than 30 points. My VantageScore fell 13 points.\u00a0These two main credit scoring models consider most of the same factors when calculating your credit score but weigh them a bit differently. The\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/finance\/what-makes-up-credit-score?utm_campaign=ct_prod&amp;utm_content=866458&amp;utm_medium=wire&amp;utm_source=syndication&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\">things that affect your scores<\/a>\u00a0are:<\/p>\n<ul class=\"articleList\">\n<li>\n      <strong>Payment history:<\/strong>\u00a0Are you paying bills on time?<\/p>\n<\/li>\n<li>\n      <strong>Credit utilization:<\/strong>\u00a0How much of your credit limits are you using?<\/p>\n<\/li>\n<li>\n      <strong>Balances:<\/strong>\u00a0How much do you owe overall?<\/p>\n<\/li>\n<li>\n      <strong>Age of credit:<\/strong>\u00a0What\u2019s the average age of all your accounts?<\/p>\n<\/li>\n<li>\n      <strong>Kinds of credit:<\/strong>\u00a0Do you have a mixture of revolving accounts, like credit cards, and installment loans, where payments are equal and run for a set period?<\/p>\n<\/li>\n<li>\n      <strong>Recent inquiries:<\/strong>\u00a0How many hard pulls on your credit do you have?<\/p>\n<\/li>\n<\/ul>\n<p>I had a good history of on-time payments, an acceptable mix of credit and the recent inquiries on my report were minimal. Once the new loan showed up on my credit report, the biggest drag on my score was that the new loan\u2019s balance was, of course, 100% of its origination amount.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Unfortunately, when you refinance, the information about how much of your previous loan you had paid off doesn\u2019t carry over. You also likely will lower your overall age of accounts by replacing an older account with a brand-new one.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"3_ways_to_minimize_the_effects_on_your_credit\"><\/span><strong>3 ways to minimize the effects on your credit<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>You can take steps to protect your credit during the refinance process:<\/p>\n<ul class=\"articleList\">\n<li>\n      <strong>View interest rate shopping as a sprint, not a marathon:\u00a0<\/strong>When you shop around for the lowest rates, submit all of your applications within 14 to 45 days so they can be treated as a single credit inquiry. Newer FICO scoring models allow a 30- to 45-day period, but some older FICO scoring methods that are still in use limit the window to 14 days. VantageScore also uses a 14-day window.<\/p>\n<\/li>\n<li>\n      <strong>Don\u2019t plan another large purchase around the same time:\u00a0<\/strong>If you\u2019re planning on buying a new car or financing a large purchase on a credit card, time your purchases around your mortgage refinance. Buying a car or opening a new credit card will result in more hard pulls on your report, which will further drop your credit score. Big balances on your credit card could increase your credit utilization ratio and cause your score to take a hit.<\/p>\n<\/li>\n<li>\n      <strong>Make sure you know when your first new mortgage payment is due:<\/strong>\u00a0Refinancing your mortgage can be a lengthy and detailed process. Sometimes your new loan can be sold to a different lender before you even make your first payment. Be clear on when your payment is due and whom to send it to. Missed or late payments can greatly affect your credit score.<\/p>\n<\/li>\n<\/ul>\n<h6><span class=\"ez-toc-section\" id=\"The_good_outweighs_the_bad\"><\/span><strong>The good outweighs the bad<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>For me, and for many people, refinancing to a lower interest rate mortgage is the right move. The money saved over time by reducing the monthly payment or slashing the length of the loan will far outweigh any credit score damage.\u00a0The credit score dip is temporary, and the numbers should continue to bounce back the more the new loan is paid down.<\/p>\n<p>Stacie Charles has refinanced her Texas home more than once in the 12 years she\u2019s lived in it and experienced a dip in her credit score each time, by as much as 40 points: \u201cMy scores dropped as soon as the new mortgage showed up on my credit report.\u201d But she saw her credit scores creep back up several months after the refinances, and they were fully restored after four to six months.<\/p>\n<p>Before refinancing, do the math\u00a0to make sure it makes sense for you. But don\u2019t let the fear of a temporarily decreased credit score stop you from locking in lower interest rates. Minimize the negative effects as best you can, and know that as long as you continue to manage your credit wisely, your scores will recover.<\/p>\n<p><strong>More From NerdWallet<\/strong><\/p>\n<ul class=\"articleList\">\n<li>\n      <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/mortgages\/questions-before-refinancing?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=866458\" class=\"icon none\">The Property Line: 4 Questions to Ask Before Refinancing<\/a><\/p>\n<\/li>\n<li>\n      <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/finance\/new-credit-card-applying-for-mortgage?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=866458\" class=\"icon none\">Don\u2019t Get a New Credit Card When You\u2019re Applying for a Mortgage<\/a><\/p>\n<\/li>\n<li>\n      <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/finance\/raise-credit-score-fast?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=866458\" class=\"icon none\">8 Ways to Build Credit Fast<\/a><\/p>\n<\/li>\n<\/ul>\n<p><em>Erin Hurd is a writer at NerdWallet. Email: ehurd@nerdwallet.com.<\/em><\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Erin Hurd\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Erin_Hurd\"><\/span>Erin Hurd<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B21005575-02D4-D4B5-4572-D2051AD00C48%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#NerdWallet: This is what refinancing a mortgage can do to your credit score&#8221; The good news is that it\u2019s likely temporary This article is reprinted by permission from NerdWallet.\u00a0 When interest rates started to drop in the spring of 2020, my husband and I took notice. We watched as the rates on both fixed-rate and&#8230;<\/p>\n","protected":false},"author":1,"featured_media":159563,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-159562","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/159562","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=159562"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/159562\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/159563"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=159562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=159562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=159562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}