When you are preparing to buy a home, it is natural to want your credit profile to look clean and organized. Many buyers think closing old credit accounts will improve their score, simplify their finances, and make them appear more responsible to lenders. In reality, closing old accounts can have the opposite effect. Those accounts play a much bigger role in your credit profile than most people realize and shutting them down can create sudden changes that impact your mortgage approval.
The Differences Between Hard and Soft Credit Inquiries
Credit inquiries, also known as credit pulls or checks, are a standard part of assessing creditworthiness. However, not all credit inquiries are the same. They fall into two main categories: hard and soft credit inquiries.
Will Refinancing Impact Your Credit?
Refinancing a mortgage can provide significant financial benefits, such as lowering your interest rate or accessing home equity. However, it’s important to understand how the process may temporarily affect your credit score.
