TIL how risky cash out refi can be if you don't check your credit report first

Last month I was dead set on doing a cash out refi on my house in Phoenix. I had a plan to use the money to pay off some high interest credit cards and maybe fix up the kitchen. But then I actually pulled my credit report and found a collections account from 3 years ago that I thought was paid off. It was only for $180 but it dropped my score enough that the rate they offered me was way higher than I expected. I almost signed anyway but my neighbor told me to wait and dispute it first. So now I'm sitting here waiting on the dispute to clear before I move forward, which is annoying but probably smarter. Has anyone else had a small old debt mess up their refi plans?

2 comments

2 Comments

jessica_miller3d ago

Buddy of mine in Tucson almost lost out on a refi because of a $75 medical bill he didn't even know existed from five years ago. Ended up paying it and the lender still gave him a hard time for weeks.

jesse_craig263d ago

Yeah, that $180 headache is more common than people think. Best move is always pull your full credit report from all three bureaus a few months before you apply for anything.

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