When you seek to refinance your existing car loan your credit is checked. They refer to this as a "hard inquiry." Therefore, your credit report will be reviewed by the lender before they make a decision. Keep in mind that this type of credit check will result in a little drop in your credit score. The agencies that report credit will believe that more debt, in the form of a new loan, will increase the likelihood of you, the borrower, skipping a payment. This is why they reduce your total score. However, after a while, the credit agency will eventually see that the previous loan has been paid off. Then when they see that the original debt has been reduced and you have a good number of monthly payments fulfilled, your credit rating should rise once again.