Oct 18, 2018
are useful when making large purchases like a new home or car. Like many purchases, it’s possible for a loan to become less suited to your needs as better options become available. Whether your was less than ideal or interest rates were higher at the time you originally borrowed, refinancing a loan lets you align your lending needs to match your current situation and save money along the way.
Through refinancing, a new financial institution may allow you to take out a new loan to pay off an older loan. This process lets you save money by securing a lower interest rate, extending a repayment term, or a combination of the two. Whatever your reason, do you know how refinancing a loan can affect your credit?
Before refinancing a , , or , it’s a good idea to check if your credit has improved since taking out the original loan.
Potential lenders are going to review your for a record of your credit accounts and activity. They’ll want to know that the new loan doesn’t put them at risk. Cleaning up and before applying for a refinanced loan may help to boost your credit score. The more you’re able to improve your credit score, the better opportunity you’ll have to receive the lowest possible interest rate.
The good news is that checking your credit report and score won’t negatively impact your score. These are that are not factored into your credit score calculation. In other words, you’re safe to check these essential items as many times as you need before applying for a refinanced loan.
While checking in on your own credit doesn’t affect your score, refinancing a loan may. Refinancing can affect your credit by:
Finding the best interest rates for a refinanced loan typically involves shopping around. While multiple unrelated hard credit checks can lower your credit score, credit scoring models view multiple hard inquiries for the same type of loan as a single inquiry as long as they occur within a grace period. This grace period can range from 15 to 45 days.
Comparing multiple mortgages, for example, won’t negatively impact your credit score any differently than applying for a single mortgage – if you work quickly. If you spend several months on the process, it’s possible your credit score could take multiple hits and make it difficult to qualify for the best rates.
Refinancing is a smart way to save money by restructuring debt that is no longer the best fit for you as the borrower. Regularly checking your can help determine the best time to apply for a new . Shopping around with multiple lenders can help secure the best interest rate available.
The refinancing process has the potential to slightly decrease your credit score but as long as your payments are made on time, it isn’t likely to affect your credit significantly over the long term.
Credit scores can be very confusing and intimidating, and it’s very hard to find reliable information to understand your credit scores. That's why we created this definitive guide.
Sep 25, 2019
Welcome to The Ultimate Guide To Personal Finance For College And University Students, by Borrowell! In this five-part guide, you’ll learn about important personal finance concepts that will prepare you for the next few years of school and beyond.
Aug 07, 2019
Today is an exciting day for all of us at Borrowell! We’re pleased to share that over a million people have signed up to Borrowell as members. This is an important milestone. It means that one in every 25 adult Canadians uses our free credit monitoring service! By that measure, this makes Borrowell Canada’s largest fintech company.
Apr 02, 2019
Thanks A Million Borrowell Officially Passes One Million Members
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