How does refinancing a car loan affect your credit score?

I’ve been thinking about refinancing my car loan, but I’m worried about my credit score. I’ve worked really hard to get it as high as it is, so I don’t want to lose all that hard work. How will refinancing affect my credit score?

Answer
Refinancing your car loan will cause a minor dip in your credit score for a few months. This is because lenders will look into your credit history, causing a hard inquiry to appear on your credit report, which always causes a dip.
Your credit score should return to normal after you’ve paid your first few bills on time and in full.
While you’re thinking about refinancing your loan, you might want to rethink your current car insurance coverage, as well. With the Jerry app, you can compare competitive insurance quotes from over 50 top providers. Jerry can also sign you up for a new policy and even help you cancel your old one.
Lauren Smith
Answered on Nov 17, 2021
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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