topic Re: How much does a refinance drop your score in Auto Loans

How much does a refinance drop your score

Greenivy — Fri, 29 Jul 2022 21:52:03 GMT

So I am looking to refinance out of my extremely high interest rate of 12.49%. I've gotten quotes for 5% which is a vast improvement for me. How much should I anticipate my score to drop with basically starting a new loan?

Re: How much does a refinance drop your score

Greenivy — Fri, 29 Jul 2022 21:53:05 GMT

To add more context my original loan is a year old.

Re: How much does a refinance drop your score

pizzadude — Fri, 29 Jul 2022 22:00:05 GMT

If your only installment loan is reported closed before your new loan reports, then I'd expect you'll take a small score hit ; additionally for the refinance any new inquiries will also slightly ding your FICO score.

In this case I wouldn't worry about it, as you'll be saving a decent amount of money by refinancing and also your score should rebound not too long after the new loan reports.

Re: How much does a refinance drop your score

Greenivy — Fri, 29 Jul 2022 22:06:34 GMT

I'm only doing pre-qualification soft pulls, for this reason. I'm only applying once for the one that gives me the best rate, thus one hard pull.

Re: How much does a refinance drop your score

Greenivy — Sat, 30 Jul 2022 03:18:12 GMT

Update: I pulled the trigger.....I was approved. At least I will only have one hard inquiry.....instead of the 10 I've had in the past buying a new car from a dealership.

I got an alert like one minute after I submitted my application regarding the inquiry lol.

We shall see how much the drop is from the inquiry/new account.