Comenzar
Hable con nuestro equipo para empezar a ahorrar 800260,5355
If you’re considering refinancing your car loan, you may be cautious about doing anything that could affect your credit. Keeping a strong credit score can help you get lower rates and better terms on your new car loan. But applying for new loans can drop your score by several points when lenders check your credit.
You can safely reduce the credit impact of refinancing by comparing offers that use a soft credit pull, which won’t affect your score. Learn the difference between hard and soft credit inquiries, and how to shop for refinance loans without affecting your credit.
A soft credit check is often used by lenders and credit card companies to see if you might qualify for special offers. It’s also used by landlords evaluating your rent application, or even potential employers screening you for a job. You also do a soft credit check on yourself when you check your own credit report.
Soft credit checks pull your credit history, showing the same information as a hard credit check would. This includes your credit score, payment history, and any negative information like defaults or bankruptcies. Soft credit checks don’t require your permission.
Soft credit inquiries don’t impact your credit score the way hard credit checks can.
A soft credit pull is a way for you to see your own credit report, or for lenders to prequalify you for offers. It isn’t factored into the credit scoring model that credit agencies use, and it isn’t visible to other lenders, so it doesn’t affect your credit score.
A hard credit inquiry, on the other hand, is recorded on your credit report, and it’s visible to other lenders when they review your credit. Hard credit inquiries can drop your credit score by a few points.
Soft credit checks provide information about your credit history, but they’re not used in application decisions. A lender might do a soft credit pull to find out your payment history without requesting your permission first. They can use that information to offer you special deals on a credit card or auto loan, for example.
Lenders use hard credit inquiries to determine whether to lend to you and to help set the interest rate. When they do a hard credit check, they can view other hard credit checks that other lenders have run on your credit report.
Soft credit checks are often used at the beginning of the auto refinancing process. Many lenders let you check your rate by prequalifying, which uses a soft credit inquiry to look at your credit score. Based on the information in your credit report, the lender can give you an idea of how much you could borrow and what your rate might be. If you don’t move forward with the application, there’s no impact on your credit score.
Soft credit pulls are useful at this stage because they let you shop around and collect different offers without worrying about damaging your credit. They give you flexibility to explore different refinancing options to find the right deal. You only experience a hard credit inquiry once you decide to formally apply.
There’s one thing to keep in mind, however: the offer you receive with a soft credit pull could differ slightly from your final offer from that lender. It’s a ballpark estimate based only on your credit history. Your final rate and terms will depend on the lender’s verification of your full financial picture, including your income and vehicle information.
You can protect your credit score and still shop around for auto refinance offers if you know what to do.
First, use an auto loan refinancing calculator to see how much you might save by refinancing.
Then, look for prequalification offers that use soft credit pulls. RefiJet offers online refinancing with soft credit checks so you can see offers designed especially for you. You can browse and compare lender offers without impacting your credit.
Once you’re ready to apply, keep your applications with hard credit checks to a tight 14-day window. They’ll be treated as one hard credit inquiry, minimizing the effect on your credit score.
Following are some of the most frequently asked questions about soft credit checks.
A soft credit check is an inquiry that looks at your credit report without impacting your credit. Although soft credit checks stay on your credit report for a year or longer, they’re not visible to other lenders like hard credit inquiries are.
The main difference between a soft vs. hard credit check is that soft credit checks don’t affect your credit score and hard ones do. A soft credit check just provides information about your credit history. Lenders use hard credit checks to help them decide whether to loan to you.
Lenders often use soft credit checks to prequalify you for refinancing offers. Since the soft credit check doesn’t affect your credit, you can shop around for multiple offers to find the best fit.
Offers based on a soft credit check can give you a rough estimate of what you could qualify for, but they’re not final. That requires a hard credit check and verification of your income and other financial information.
Soft checks are mainly used at the beginning of the auto refinance process, when you’re comparing offers. Once you choose a loan offer and move forward with a formal application, the lender will perform a hard credit check as part of the approval process.
Wondering when to refinance your car loan? Learn the best timing, the signs you will benefit, and what to check before applying.
