Consolidating debt into your mortgage often improves your credit over time. In the short term there can be small dips. Here’s what to expect.
Short term
- A hard inquiry when you apply can lower your score slightly for a while.
- A new or larger mortgage appears on your report.
- Closing accounts can change your available credit and history length.
Medium and long term
- Lower card balances reduce your credit utilization, one of the biggest score factors.
- On-time mortgage payments add positive history.
- Fewer accounts with balances can help.
What makes it stick
- Keep card balances low or at zero.
- Pay every bill on time.
- Avoid opening new credit for a while.
- Check your reports after closing to make sure the paid debts show as paid.
See what to do with your paid-off cards.
If your credit is already damaged
Consolidating can be a turning point, especially if late payments stop. See consolidating with late payments.
This article is general information, not financial or legal advice. Lender requirements, rates and fees change and depend on your situation.