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How does auto loan refinancing affect credit score?

You were asking yourself 'how does auto loan refinancing affect credit score?'
Short answer is: not at all! Refinancing practically means paying off your previous loan, which does not affect your credit. At the same time, however, you are indeed applying for a new loan and depending on the auto loan company you work with, some do ping your credit.

We for example don't! We only do a soft credit pull.

Let's provide a little more context: when applying for a loan, the auto loan company wants to see how well you've made your payments so far. The only way to find out is by checking your credit. In the past, every credit check hurt your credit.

People naturally became very hesitant and therefore, the credit bureaus introduced the 'soft credit pull', which allows the auto loan company to access the exact same information. The only difference: if a auto loan company does a soft pull, other banks will not see that you've been 'shopping for a loan'.

For as long as you're just browsing that's ok. Once you do decide to refinance you loan, however, the auto loan companies will likely insist on a hard credit pull to document that you now have a loan with them. The goal is to share knowledge across lending companies.


Haven't explored refinancing yet?
WithClutch.com is a fully digital platform that lets car owners like you do so from the comfort of their own home. No need to set a foot in a bank or credit union. You can lower your rate or get cash in as little as 20 seconds.

Follow three simple steps to refinance your auto loan, get approved in seconds and save thousands in minutes.

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