Yeah, disputing errors is definitely worth the hassle. But honestly, I'm curious—did you notice a big difference from just paying down debt too? I've heard mixed experiences about how much small debt payments actually impact refinancing rates. Seems like lenders sometimes care more about your debt-to-income ratio than a slight credit score bump. Either way, I guess every little bit counts when you're talking thousands saved over the life of a loan...
I've seen clients get mixed results too. Paying down debt definitely helps your debt-to-income ratio, which lenders often prioritize, especially if you're borderline on qualifying. But honestly, if your credit score is already decent, shaving off a small debt might not drastically change your rate. I've noticed lenders sometimes care more about larger debts—like car loans or student loans—than minor credit card balances. Curious though, did anyone here find that consolidating debts before refinancing made a noticeable difference?
When we refinanced a couple years back, we had a decent credit score already, but our lender seemed way more concerned with the bigger debts—especially my wife's lingering student loan balance. We considered consolidating some smaller debts beforehand but ultimately didn't bother... honestly, the lender barely glanced at our smaller credit card balances. So yeah, I think you're right; consolidating might help if you've got significant debts scattered around, but for small stuff, probably won't move the needle much.
We had a similar experience when we refinanced last year. Our credit was pretty solid, but we had a car loan and a couple of smaller credit card balances hanging around. I remember thinking maybe we should pay off those smaller debts first, just to tidy things up, but our lender barely even mentioned them. Instead, they zeroed right in on the car loan—asking about monthly payments, remaining balance, interest rate, etc. It seemed like they were mostly concerned with how much of our monthly income was already spoken for by bigger debts.
I guess it makes sense, though, right? From their perspective, they're probably more worried about your ability to handle larger monthly obligations rather than a few hundred bucks here or there on credit cards. But here's something I'm still curious about: does anyone know if lenders treat different types of debt differently? Like, is student loan debt viewed differently from auto loans or personal loans when refinancing? Because our lender seemed particularly interested in the car loan, but didn't really dig into our student loans much at all, even though the balances were similar.
Also, I wonder if consolidating smaller debts might actually hurt in some cases. Like, if you consolidate several small debts into one larger loan, could that make your debt-to-income ratio look worse, since now you've got one bigger monthly payment instead of several smaller ones? I don't know, just something I've wondered about since we went through the process.
Anyway, based on our experience, I'd agree that consolidating smaller debts probably isn't worth the hassle unless they're really adding up to something significant. Seems like lenders are mostly looking at the big picture—your overall debt load and monthly obligations—rather than sweating the small stuff.
Yeah, your experience lines up pretty closely with mine. When we refinanced a couple years ago, I was worried about my credit card balances too—nothing huge, but enough to make me wonder if I should knock them out first. Our lender barely glanced at them, though. Instead, they went straight for our auto loan and a personal loan we had at the time. Like you said, it seemed like their main focus was on the monthly payments and how much of our income those bigger debts were eating up.
About student loans versus car loans or personal loans... from what I understand (and what our lender hinted at), lenders do sometimes treat different debts differently. Student loans often seem to be viewed as "good debt"—not exactly good, but more neutral, since they're investing in education and career prospects. Auto loans, personal loans, and credit cards tend to fall more into the discretionary spending category, so lenders might scrutinize them a bit more closely.
Your question about consolidating smaller debts is interesting too. I've wondered the same thing myself. A buddy of mine consolidated several smaller debts into one loan before refinancing, thinking it'd simplify things. But the lender saw it as one big monthly payment instead of several small ones, and it actually hurt his debt-to-income ratio a bit. Nothing drastic, but it didn't help him like he thought it would. So yeah, your gut feeling might be right on that one.
Anyway, it's reassuring to hear others had similar experiences. Refinancing can feel like such a guessing game sometimes... Glad it worked out for you in the end!
