Refinancing will hurt your credit rating a bit at first, but it could actually help in the long run. Usually, your score will drop a few points, but you can recover in a few months. Refinancing and loan modifications may temporarily lower your FICO scores in some areas, but they can save you money with a lower monthly payment. The extent to which a rating is affected depends on how it is reported and on the additional information in your credit report.
Refinancing is a way to get a better deal on a loan or credit account, such as a mortgage, personal loan, or auto loan. While it has personal financial benefits, refinancing affects your credit score and usually causes a small, temporary drop. To help you understand the implications of refinancing a loan, here's a comprehensive guide that answers the question: How does refinancing affect your credit score? Refinancing a personal loan will affect your credit score much like refinancing a mortgage. Refinancing your mortgage may take longer than expected, so don't expect the process to close in any given month. Even with the possibility that your credit score will be affected, the advantages of refinancing your mortgage can offset it with You grow up.
