Question by BleadGreen: Will refinancing my auto loan to a lower monthly payment and less interest paid out, hurt my credit score?
I’m preparing to buy a house next year and doing everything in my power to increase my credit score when the mortgage process starts. I have an auto loan @ 6.24% interest rate, and my truck will be paid off in 3 years. I’ve pretty good credit right now. However, if I decide to refinance my auto loan for a lower interest rate and monthly payments, will that hurt my credit score?
Answer by Rush is a band
The lower rate and the lower monthly payments won’t hurt your score. What might cost you a few points initially is the application for the new loan as seeking new credit always lowers your score. The fact that you would then re-pay the old loan and then not seek new credit for a while should bring it back up.
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