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If I apply for a car loan with two different lenders, will that lower my credit score?
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DuelleMarley
10 months ago
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When you apply for a car loan, the lender will do a hard inquiry on your credit report, meaning they pull your credit report to check your history and credit score to determine approval for your loan application. Hard inquiries show up on your credit report for two years.
Credit inquiries are one of the five key components that affect your credit score and every hard inquiry will slightly lower your credit score. A lender may perceive a consumer who has had too many credit inquiries as desperate for credit or as a potential credit risk. So be mindful of how many different lenders you go to apply for an auto loan because it can add up to bigger drop on your credit score than expected. Check out the graph of the distribution of credit score to number of credit inquiries from the Credit Karma community for a sense of how many hard inquiries can impact your credit score.
You can check how many inquiries you have at CK, just visit:
https://www.creditkarma.com/report/inquiries
By the way, checking your credit score through Credit Karma is a soft inquiry, not a hard inquiry, and will not lower your credit score.
chuyskywalke 2 months ago
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What is the best way to shop around for good auto lending then? If each credit check by auto lenders is a hard inquiry, is there a way for them to do soft inquiries until you go to actually do the deal?
smosser 10 months ago
Inquiries for big purchases like auto and home are considered a single inquiry if you apply within 30-45 days. This is done so that shopping for rate on large purchases don't hurt your score.
CK Moderator
If you are shopping for a new or certified used car loan the best thing to do is look at all 3 credit scores, most all banks and dealer used credit sources use experian if your score is in the high 700's you'll get a rate of 2.9-4.9 anything down to 650 will get you about 8.9 anything below that and you most likely will have a very hard time getting credit or it'll be in the high 18 plus percent rate.
shawnj1234 8 months ago
I am looking for a loan for $2000.00. I got scammed in 2007 for $1800 and am still in the hole. I just need this boost to get back on track. I had a bankruptsy in Feb 2009 and now all other debt is coming off and and can pay off the rest. Any suggestions.
nsyncit 10 months ago
I would say your not going to be able to get a loan...of any kind...No Bank will take a chance on you!!
kemper60 9 months ago
No BANK will take the risk for 2 years! However if you are in a bind and are williing to pay the price a finance company will!!! there are several that charge an outragious fee and interest but it will help you get back on track.
shawnj1234 8 months ago
or try a credit union. mine will do a secured loan 18 months after discharge of a banko.
robynh66 7 months ago
I had an two inquiries on my account for a re-finance on my mortgage where I did not take on any new debt and ultimately re-financed with one of the companies. Additionally, I had an inquiry for an auto loan, to see what it would cost. I decided not to get the loan, but the inquiry is on my record. I have not take on any new debt in the last year, and have in fact lowered it. How long do these inquiries remain on my record, and is there any way to request them removed...like the auto financing that I was looking in to, but did not get?
ltorgeson 9 months ago
Inquiries generally stay on your credit report for 2 years. There is no way to remove them if they are accurate. Most lenders only look at recent inquiries but so it should not affect your score after a few months.
CK Moderator
I applied for car loan and shop with 3 dealers and 3 banks( Done within 30 days) but reflected as 6 new hard inquiries. It should be one inquiry only as you pointed out. What should I do?
ledenila 9 months ago
The inquiries will count as one when calculating your credit score. But the 6 inquiries are accurate if you applied at all 6.
CK Moderator
Two years ago I refinanced my mortgage. I had 5 inquires from my looking. I had always been told they would count as ONE since they were all mortgage related and withing 30 days or less. THAT DID NOT HAPPEN. I was hit on all 3 bureaus just as if I had applied for 5 separate loans. My score has just now recovered and in December the last one will fall off.
I wish it were the way you say CK, but realty is they all effect the score, regardless of what they tell you - at least they did mine.
Cland1236 9 months ago
A few things to note, the inquiries have to happen within a specific time frame usually 30-90 days. Secondly, the inquiries will all appear on your report. However, they will only be counted as one if they are within the right time frame. Regardless all will appear on your credit report.
CK Moderator
When you apply for a car loan, the lender will do a hard inquiry on your credit report, meaning they pull your credit report to check your history and credit score to determine approval for your loan application. Hard inquiries show up on your credit report for two years.
Credit inquiries are one of the five key components that affect your credit score and every hard inquiry will slightly lower your credit score. A lender may perceive a consumer who has had too many credit inquiries as desperate for credit or as a potential credit risk. So be mindful of how many different lenders you go to apply for an auto loan because it can add up to bigger drop on your credit score than expected. Check out the graph of the distribution of credit score to number of credit inquiries from the Credit Karma community for a sense of how many hard inquiries can impact your credit score.
You can check how many inquiries you have at CK, just visit:
https://www.creditkarma.com/report/inquiries
By the way, checking your credit score through Credit Karma is a soft inquiry, not a hard inquiry, and will not lower your credit score.
chuyskywalke 2 months ago
Thanks!
DuelleMarley 2 months ago