Mortgage pre approval/Auto refinancing

[Anonymous]

I'm trying to get preapproved for a mortgage and recently refinanced a vehicle with wfds in order to lower my debt to income utilization to get a higher pre approval amount.  In doing so wfds closed my original loan and it caused my TU score to drop 27 points.  Will my score increase to what it was once the new loan and first payment hits my report?

[Anonymous]

Will it return to its original number?  Yes.

Will it happen next month? Probably not.

When the new loan hits, it will give you back the points you lost for having no open installment loans.

But you will be dinged a bit for having a "high-balance" installment loan (a brand new loan with 0 or 1 payment deducted from its original balance can cost you points).

That short-term damage will go away one you've paid 6-12 months or so on the new loan (depending on the health of your file overall), and your score will return to its original spot (or even end up a few points higher, as other accounts and payment histories on your report age meanwhile).

[Anonymous]

Thanks.  Score went back up today after new loan hit report.  20 points higher than what it was.

[pipeguy]

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@Anonymous wrote:

Thanks.  Score went back up today after new loan hit report.  20 points higher than what it was.

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I'd call that a win-win ! 

[StartingOver10]

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@Anonymous wrote:

Thanks.  Score went back up today after new loan hit report.  20 points higher than what it was.

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Wow!  Lower payment and higher score!  Love it