Impact of Multiple Car Loan Inquiries on Credit Score

Myth: Multiple Car Loan inquiries hurt your credit score more than one inquiry.

Fact: The credit bureaus treat these as one inquiry if they are made within a few weeks of obtaining an auto loan.

We often get questions and concerns about completing multiple car loan applications because people believe that completing more than one application will damage their credit score. This is NOT true. Multiple car loan inquiries within a few weeks will NOT impact your score anymore than completing one application. The same holds true for mortgage and student loans. Inquiries like these are not treated the same as inquiries to open multiple credit card, store accounts, and other typical revolving credit types which historically pose a great credit risk.

According to MyFico.com, the credit bureaus understand that consumers are shopping for the best rates. They will not penalize someone who is obviously comparison shopping before they obtain their car loan. Furthermore, when consumers are shopping for a car loan the amount their credit score drops tends to be less than 5 points for most people.

Remember, the most important factor for credit scores is paying bills on time. Continuing to do so will go a long way in improving a credit score and being able to get the best interest rates and offers.

Use this to your advantage to find the best car loan interest rates you can.

For more information visit MyFico.com