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Jamers220

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Credit Score Dropped After Auto Refinance
I brought my credit score way up over the past year. I paid off all my debt and was finally cruising in "Good". Because of this, I decided to refinance my auto loan - based on credit karma's own recommendation. I did it through my bank. After the hard inquiry, my score dropped about 6 points. Here I am a little over a month, my score dropped 22 points. The new loan is finally on the report. Experian has dropped me into "Fair" and credit karma picked up the new loan and dropped me 3 points each. Is this normal? I have busted my butt working 2 jobs trying to get back on track financially. I was so happy to see it go up, but now that it's dropped back into Fair... It's disheartening. No cc balances either. Never late on any payments. Hoping after a month or so it creeps back up...?

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That is normal. You should do some more reading. Your scores will recover as the new account starts to age and you get the balance paid down on the loan. Your scores took a hit for the following reasons: 1) Hard Inquiry 2) Reducing the "average age of accounts" 3) going from a loan that was paid down to a loan with a full balance owed.

I also advise you to keep an eye on your FICO scores from time to time, they are more important than other scoring systems.

Reply by
NEEDHELP218

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Absolutely normal is correct. You should only ever open new accounts if you do not need an immediate credit score jump. Sure, it can save you money in the long run with interest, etc. but if you are in the market to buy a house, car, etc. you need your credit score to be good to score lower interest rates or to get approved at all.

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