Will refinancing to consolidate mortgages affect my credit score?

Author: Boychuk Mortgage Group |

Refinancing to consolidate mortgages can positively impact your credit score over time. Initially, applying for refinancing may cause a slight dip in your credit score due to the credit inquiry and closing of existing accounts. However, in the long term, this strategy can improve your credit score by lowering your credit utilisation ratio—one of the significant factors in credit scoring. Additionally, having a single, manageable payment reduces the risk of missed or late payments, contributing positively to your payment history, which is another crucial component of your credit score. Over time, as you make consistent, on-time payments, your credit score is likely to improve.