CFPB Report Finds Cash-Out Mortgage Refinance Borrowers Improve Credit Scores

Cash-out borrowers paid down credit card debt and auto loans WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) published a report about financial outcomes for cash-out refinance mortgage borrowers. Cash-out borrowers had an initial sharp improvement in credit scores, followed by a gradually worsening of their scores. Scores in general, however, stayed above their pre-refinance levels. The report confirms that borrowers often do use the money from a cash-out refinance to pay down other debts, particularly credit card and auto loan debt. The report looked at borrowers between 2014 and 2021. Home equity is the third-most common financial asset for families, and a significant source of savings for homeowners. A cash-out refinance lets homeowners tap into their equity to pay off other debts or fund needed home repairs, for example. At the same time, paying non-mortgage debts with mortgage debt can increase the risk of foreclosure. The CFPB's report includes the following key findings: Read Cash-Out Refinances and Paydown Behavior of Non-mortgage Debt Balances. Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372). Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit www.consumerfinance.gov. If you want to republish the article or have questions about the content, please contact the press office. Page last modified Jan. 24, 2025 @ 02:35 PM EST View older versions of this page at our public archive. Subscribe to our RSS feed to get the latest content in your reader.