Will refinancing my car loan to a lower monthly payment and less interest paid out, hurt my credit score?
I am preparing to buy a house next year and doing ething in my power to increase my credit score when the mortgage process starts. i have an car loan @ 6.24% interest rate, and my truck will be paid off in 3 years. i have nice credit right now. however, if i decide to refinance my car loan for a lower interest rate and monthly payments, will that hurt my credit score?
Answer
The real answer is yes. paying off your loan can hurt your credit score. the first car credit score will be paid off and that builds credit. however your new loan will have a high balance and will add new debt that lenders will look at. if you want to increase your credit score make larger payments on the car loan. in order to increase your credit score make sure you pay off balances and do not get your credit pulled by a lender. also make sure you order a copy of your credit score (this does not count against you) so you can check for errors. finally make sure your nice credit is updated as this can help build your score.a website i have recommended in the past would be...http://www.safelinked.info/go.php?link=autohope that helps.
