Does Shopping Around for a Car Loan Hurt Your Credit? Here’s the Truth
When it comes to improving your credit and managing your finances smartly, few things feel riskier than having your credit pulled multiple times. You might have heard that shopping around for a car loan or mortgage can wreck your score, but is that really true?
Let’s clear it up.
📃 What Happens When You Apply for a Car Loan
Every time a lender pulls your credit to evaluate your application, it results in a hard inquiry on your credit report. These inquiries are visible to credit bureaus and, yes, they can impact your score—but not the way you might think.
✨ The Truth About Multiple Inquiries
When you're rate-shopping for a car loan or mortgage, credit scoring models like FICO and VantageScore understand what you're doing. They treat multiple inquiries within a specific time frame as a single inquiry for scoring purposes.
Here’s how the timeframes break down:
FICO Score (newer models): 30-45 days
FICO Score (older models): 14 days
VantageScore: 14 days
So as long as you’re applying for the same type of loan (auto, mortgage, etc.) within that window, your credit score only gets dinged once.
📄 What Shows Up on Your Credit Report?
Even though your score is only impacted once, each lender’s hard inquiry still appears individually on your credit reports from Experian, Equifax, and TransUnion. That’s normal. But again, it’s only one impact to your score if done within the protected shopping window.
❌ Common Misunderstandings
MYTH: 5 car loan applications in a week will hurt my score by 50 points.
FACT: If they’re coded correctly and fall within the window, your score takes a hit as if there was just one inquiry.
MYTH: Multiple inquiries look bad to lenders.
FACT: Lenders expect to see multiple inquiries for large purchases. It's a sign of smart financial planning, not recklessness.
🔧 How to Protect Your Score While Loan Shopping
Keep your applications within a short time frame. Aim for 14 days to be safe.
Stick to one type of credit. Auto loan inquiries must be grouped with other auto loan inquiries.
Monitor your credit. Check for errors and make sure inquiries are properly coded.
📈 Final Takeaway from Debts in a Row
At Debts in a Row LLC, we help you understand and take control of your credit with confidence. Don’t let outdated myths scare you away from rate-shopping smartly. Whether you're applying for a car loan, mortgage, or personal loan, knowing your rights and how credit scoring actually works can save you thousands.
Need help with a credit dispute? Or just have questions about what’s helping or hurting your credit? Contact us anytime!
Heather Howe
Credit Repair Specialist | Debts in a Row LLC
📲 (270) 935-1675
📧 debtsinarowllc@gmail.com
🌐 debtsinarowllc.com
"I don’t just open doors—I clear the path to get you through them."
Sources:
Experian
FICO
VantageScore
Consumer Financial Protection Bureau (CFPB)
Federal Trade Commission (FTC)
