Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!


Posted in Mortgage
Profile Image

Question By

0 Contributions
0 People Helped
i refinanced my home, and my score dropped 60 points, why? i am better off now, than before!!

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

All Responses

Results 1-3 of 3Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
654 Contributions
288 People Helped

Many factors

First off you had hard inquiry (maybe more if you shopped) that drops your score. In the long run models will only see it as one loan.

Remember that you are only seeing Vantage scoring system here, and not the +50 or so other ones.

Did you take the loan out for longer?  IE only had 20 years to pay off the loan and now rolled it into another 30 year?  Did you take any cash out from the closing so now you owe more than you did before?

There is a time delay lots of times to show closed accounts, or a lag in new accounts showing.  In my case my old mortgage showed closed withing 30 days, but it took 90 before the new one showed up.  If the reverse was to happen and you showed two mortgages on your file this could also drop it.

Basically take a deep breath and know that your score will level out in a few months to year. This is a long run game, and we do not need to stress about the short term hills and valleys.  Just keep doing things that you know help you finacially in the future and your score will have an upward trend inspite of the small downs.

Top Contributor
552 Contributions
246 People Helped

Helpful to 0 out of 1 people

Depends on how much of the property was paid off. If you paid off a huge chunk of the note, then your total loan amount will have dropped from the original loan amount, down to the amount you refinanced for. For example, if you have $50k left to pay on a $100k mortgage and you refinance, your total credit usage (total amount of debt) will drop to $50k. I *think* (could be wrong though) that if there was an equity line of credit attached somewhere that got paid off as part of refinancing, this also affects your credit utilization (basically raising that utilization percentage by dropping that equity line of credit entirely). 

Also, any major credit transaction will hit your credit rating... temporarily. 


There are a few other factors as well, if the mortgage refinance meant that your oldest active loan (the old mortgage) is now gone.

Top Contributor
2128 Contributions
3211 People Helped

Helpful to 0 out of 3 people

You Closed one Mortgage Account and Opened a New Account,  and I'm sure there were 1 or 2 Hard inquires in the process. 

Results 1-3 of 3Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.


Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.