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Posted in Auto Loans
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Question By
choupipi

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2 People Helped
Does refinancing an auto loan with another loan (much lower interest rate) hurt my credit score?
I needed a car (badly) a few months ago. The only loan I could qualify for (based on finance guy from the dealer) was what seemed to be a predatory loan from Chase for 9.9%apr for a 6 year term. I didn't quibble because I needed a car to get to work. I'm seeing offers here for 3%apr loans for 48-72 months which would save me a few thousand dollars in interest charges. Would my credit score take a hit if I refinanced?

Some background: My score is awful at 648 due to a deadbeat ex. Now that I'm divorced and debt free (except for this car loan and a credit card that I pay off completely each month), I'm hoping to get my score up so I can buy a house. My salary is very good and I could probably just pay for this car entirely in under a year if I wanted to (it's a $30k loan).

I've been a member here for a few months and it's frustrating to see how "sticky" my poor score is, even though I have high income, relatively low debt, no derogatory info, and pay my bills on time. Sigh...

Any advice would be very much appreciated.

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