Does refinancing hurt my credit score?

Hi June,

Great question! Refinancing can affect your credit score, but usually only in a small and temporary way. Here’s how it works:
• Credit inquiry: When you apply to refinance, the lender will run a hard inquiry on your credit. That may drop your score by a few points, but the effect is usually minor.
• New loan account: Your old mortgage will show as paid off and a new one opened. Anytime you open a new credit account, it can slightly affect your score at first.
• Long-term benefit: If refinancing lowers your monthly payment and makes it easier to manage debt, it can actually help your credit score over time by improving your payment history and debt-to-income ratio.

The key is to shop for rates wisely. Credit scoring models often treat multiple mortgage inquiries within a short time frame (usually 14–45 days) as just one inquiry, so you won’t get penalized for comparing lenders.

In most cases, the short-term dip in your score is small compared to the long-term financial savings of securing a lower interest rate.

Refinancing a mortgage may cause a temporary dip in your credit score because lenders perform a hard credit inquiry during the application process. Typically, this is only a few points and often recovers within a few months as long as you make on-time payments. Over the long term, refinancing can actually improve your credit if it lowers your monthly payment or helps you pay off debt faster.

It typically gives a slight dip in your credit but always consult with the proper professionals before having anyone pull your credit.

I can connect you with Rocket Mortgage GlennSellsMemphis.com

Refinancing your mortgage can cause a small, temporary dip in your credit score because lenders pull your credit during the application, but the impact is usually minor and short-lived. If you make on-time payments after refinancing, your credit score often recovers quickly and can even improve over time thanks to lower monthly payments and better debt management. The bigger question is whether the savings from locking in a lower interest rate outweigh that short-term credit hit—and for most homeowners with “ok” credit, refinancing is a smart long-term move to save money and strengthen financial stability.

Refinancing usually triggers a hard inquiry, which can cause a small, temporary dip in your credit score. In many cases, lowering your rate and payment can improve your long-term financial health. Always review your specific situation with a trusted lender before deciding.