Does refinancing a car loan negatively impact your credit score?

I've read that refinancing your car loan is a great way to save money, but I'm worried about my credit score. Does refinancing hurt your score?

Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Refinancing a car loan
can help you save hundreds (or potentially thousands) by shifting the period of your payments or lowering your APR, but it may also impact your credit score—albeit only temporarily
Refinancing can affect your credit score because it involves lenders making a hard inquiry on your credit report, which may reduce your overall score for a limited period of time.
Luckily, there is good news about the effects to your credit score:
  • The hit is minor, so your credit should only fall about five to 10 points.
  • You can expect to see your credit score bounce back within a few months after refinancing.
  • The inquiry is not likely to impact your ability to qualify for future loans.
If you can save hundreds of dollars in the long run by refinancing your loan now, a slight dip to your credit score likely isn’t a huge deal
Pro tip: To minimize the hit to your credit score, apply to all the lenders you’re considering within a 14-day period. This way, you will see only one hard inquiry on your credit report.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.

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