Mortgage refinance question

[Anonymous 1]

I recently refinanced my mortgage to a lower interest rate and my credit score dropped 54 points. The original account shows as closed but the new account has not appeared yet. Has this happened to anyone else? I'm reading a refi can make your score dip (54 points seems like more than a "dip" to me), and that in a few months after the new account starts reporting it may bounce back some. I'm wondering what others' experience with this is.

[Deleted User 1393]

Congrats on the lower rate!!.
Hopefully your credit score jumps up soon

[Anonymous 1]

Congrats on the lower rate!!.
Hopefully your credit score jumps up soon

Thanks!! My lender covered all the closing costs so it didn't even cost me anything to do it. I was super happy about that. I'm going to keep making the same payment as I was before but now 350 more is going to my principal every month.

[Anonymous 2]

We did the same thing and dropped 5 years off of our loan. I didn't notice a change in credit scores

[Anonymous 3]

It’s because your average account length is now younger. It’ll come back.

[carterscutie85]

Weird. We refinanced about a year ago and it didn't affect ours.

[Anonymous 4]

I recently refinanced my mortgage to a lower interest rate and my credit score dropped 54 points. The original account shows as closed but the new account has not appeared yet. Has this happened to anyone else? I'm reading a refi can make your score dip (54 points seems like more than a "dip" to me), and that in a few months after the new account starts reporting it may bounce back some. I'm wondering what others' experience with this is.

Credit check: When you apply to refinance a loan, lenders will check your credit score and credit history. This is what's known as a hard inquiry on your credit report—and it can temporarily cause your credit score to drop slightly. However, the money you save through refinancing, especially on a mortgage, usually outweighs the negative effects of a small credit score dip. And as you pay off your new loan over time, your credit scores will likely improve as the result of a strong payment history.

Closing an account: The loan you are refinancing will be closed, which can also lower your credit score because you are closing a long-standing credit account. However, some credit scoring models will take into account your payment history on the closed loan. As long as the closed account was closed in good standing, this lessens the hit to your credit score. In addition, as you pay down the new loan, your credit score should improve again.

Whenever you refinance a loan, your credit score will decline temporarily, not only because of the hard inquiry on your credit report, but also because you are taking on a new loan and haven't yet proven your ability to repay it. Be sure to make your payments on time, and after a few months, your credit score should go back to where it was. In fact, it may even improve as you show that you're able to handle the new loan