Does refinancing a loan make it 'new' to FICO

[Anonymous]

I have a loan that I have an opportunity to refinance at a lower rate but I don't want any 'new' acccounts.    If an account is refinanced does it appear new to FICO?

[rom828]

Yes...it'll show as new.

As a matter of fact, when I re-fied last year, I actually wound up with 2 new accounts on EQ  because the mortgage company with whom I  refinanced  immediately sold the account to Citibank, and both that  original re-fi  bank (LowCountry or something like that) and  Citi reported in EQ; only the Citi acct reported to TU and EX.

Like you, I didn't want any new accounts (I'm still struggling to get back to 5 years AAoA after new accts in 2008 and the refi in 2009), but sometimes one has to weigh the best  fiscal choice against the best FICO choice.   If you can save yourself  some money....and a refi can certainly do that.....it's probably worth whatever hit you'll take on FICO....and FICO will rebound as accounts age.

[Anonymous]

Is AAoA the only way a new account harms you?   This account is only a year old and AAoA is where I'm strong.

[haulingthescoreup]

Two potential dings for new accounts, three in a way:

1. Lowered AAoA --this won't affect you unless it drops your AAoA into a new tier, like less than 5 years
2. Presence of new account (I used to think that this was for a year, but now i think it's for 6 months)
3. The inq that results in the new account might drop your scores by a few points

The inq part isn't exactly a new account ding, but it's usually part of the process in getting a new account, except for PenFed, etc that pre-approve you for an additional card without a hard.