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If I refinance a vehicle, will it hurt me in trying to get approved to purchase a home?

If I refinance a vehicle, will it hurt me in trying to get approved to purchase a home? Credit scores range from 652-722. I have also been told that I need a credit card to show other types of open credit on my credit report. I dont want to make these changes and not be able to purchase a home.
  • August 29 2012 - Greenville
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Answers (6)

Profile picture for user4406246
Thanks to all of you!
  • August 29 2012
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yes, avoid doing that if you can. 
  • August 29 2012
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You will close an aged account and open a new tradeline, this will have a negative impact to your credit scores.

You will also have a new hard inquiry for the auto refinance which may also negatively impact your scores if you have had more than 5 hard inquiries in the past 12 months.

Also, your credit scores of 652-722, are they from the internet or did a lender pull your credit and give you those scores?

There are many "brands" of credit scores on the internet and from lenders.  Vantage scores, Plus scores, Smart scores, FICO scores to name a few.  They all have varying formulas to generate your "credit score".

90% of banks use FICO scores.

You can find a FICO score at myFICO.com.

For more credit advice you can find my website, credit blog, Facebook, Twitter, and LinkedIn information in my profile on Zillow.
  • August 29 2012
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Profile picture for JamesKuang
Your lender can best determine that by looking at your ENTIRE situation.  Refinancing a vehicle may or may not affect your loan approval.
  • August 29 2012
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Anything that has do to with your social security number is going to affect your mortgage qualification procedure.  If you are planning on buying a home, speak  with a lender asap and find out what the "don'ts" are between approval time and the closing date.  The slightest change on your credit report could cause your pre-approval to become null and void.

Jeff Metcalf, REALTOR(R)
Watson Realty Corp.
  • August 29 2012
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Profile picture for sunnyview
Before you refinance the vehicle, I would talk to your lender. Lowering your payment may actually help your ability to qualify for a home, but the new credit activity and checks may lower your credit score for a bit of time. Ask a lender before you make the move.
  • August 29 2012
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