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?

Answer
As you mentioned, refinancing a car loan can help you save hundreds or even thousands of dollars. But you’re also right in that refinancing your car may impact your credit score.
There’s no need to stress, though, since the hit on your credit score is temporary and you should see it bounce back within a few months.
Refinancing affects your credit score is because the lender conducts a hard inquiry on your credit report, which will decrease credit score about 5-10 points. Again, this is temporary. If you can save hundreds of dollars in the long run, a slight dip to your credit score isn’t a huge deal.
To maximize your overall savings, make sure to shop around for car insurance quotes online, too. Jerry can help you compare quotes from up to 50 top insurers to find the best rates for your coverage level—and sign-up only takes 45 seconds.
Eric Schad
Answered on Oct 28, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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