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Will refinancing auto loan hurt credit?

You were thinking about lowering your monthly payments and asked yourself 'will refinancing auto loan hurt credit?'
Short answer is: nope! Refinancing is the same as paying off your existing loan. Paying off your loan does not really affect your credit. Strangely, the credit bureaus count open credit accounts as a positive thing for as long as you make your payments.

At the same time, however, you are indeed applying for a new loan and depending on the lender you work with, some do check your credit.

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 lender does a soft pull, other banks will not see that you've been 'shopping for a loan'.

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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