It can, through two channels: the monthly payment counts against your debt ratio, and the balance drives your utilization, which moves your score. Utilization is the one people underestimate. We had a mutual client carrying roughly $150,000 in 0%-interest credit card balances that he was in no hurry to pay down, since the cash was sitting there anyway. Once he finally wrote the check and paid them off, his score jumped about 30 points, a meaningful swing on a large loan. High reported balances can hold a score down even when you fully intend to pay them and can easily afford to. So before you assume the balance will or will not hurt, get a soft pull and look at the current balances and utilization. That shows the real picture instead of a guess. If a balance is sitting high, paying it down (or restructuring it to lower the utilization ratio) before you refinance can lift the score and improve your terms. We cannot promise a specific point gain, but the lever is real. The free Roadmap conversation is a good place to figure out whether paying down first is worth it in your case.