Will Rate Shopping Hurt My Credit Score?

We generally make money when you get a product (like a credit card or loan) through our platform, but we don’t let that cloud our editorial opinions. Learn more about how we keep this compensation from affecting our editorial views.

Will Rate Shopping Hurt My Credit Score?

The best part about credit scores seems obvious. When it comes to interest rates, down payments and credit card terms, your good credit score can potentially save you money. What more do you need to know?

There are moments when this connection is less obvious though. When you're shopping for the best deal on a mortgage or auto loan, the rules determining your credit score can seem like a hindrance. Many worry that shopping around for the best rates, a habit that is seemingly crucial to getting good terms, will adversely affect their credit scores. If a prime benefit of having a good credit score is potential savings, but shopping around for the best deal on a mortgage will hurt your credit score, then what's the point?

Read on to dig in.

So will rate shopping hurt my credit score?

Yes and no. You probably know that each time you apply for a new line of credit you're normally hit with a hard inquiry. Hard inquiries can negatively affect your score, so moving from lender to lender and piling up a bunch of these in a small period of time is probably not a great idea.

Still, depending on what type of credit you're shopping around for and what model you're getting your score from, the extent of the damage can vary. If you're looking for an auto loan or mortgage specifically, some credit score models will allow for some level of shopping around by essentially viewing multiple inquiries within a certain time period as just one. Bureaus usually identify the fact that you're comparison shopping by noticing the types of credit lines you're applying for and the size of your requested loan, so it may be best to stay consistent. The time period over which you can rate shop under these models without feeling the effect of multiple inquiries can vary and is often from around 14 days to up to 45. Beware that a single inquiry could still have a somewhat negative effect on your credit. Also keep in in mind that this rate shopping adjustment is only adopted by some credit score models and usually only applies to auto loans and mortgages. So if you're applying for a dozen credit cards over a month or two, you're likely to still incur a bunch of hard inquiries.

What else can I do?

It's great that many models will recognize when you're shopping around, but there is a lot of variation between models so it's good to have a backup plan.

Before having a bunch of institutions run your credit, do some research on your own. Consult the lender's website as well as third party forums like Credit Karma's review section to learn about the terms commonly offered to those with similar credit profiles. This way you can narrow down your choices before you start applying and your credit is run.

Another tip that could keep your credit score from dropping is to only apply for one type of credit account at a time. For example, if you're in need of a mortgage, you may want to wait until later to get yourself a new car and the accompanying auto loan. Attempting to secure too much credit at one time may give lenders the impression that you're desperate for cash or unprepared to handle your debts responsibly.

More generally, it's best to go into the process with your credit health in great shape. Knowing that a few hard credit inquiries might dip your score a bit, prepare yourself by otherwise checking that your credit report is spick-and-span and ready for a little bit of a stress test. Monitor your credit and dispute any inaccuracies beforehand to help get you in the best position to get a great deal.

Bottom Line

Too much hunting around for the best terms on a new line of credit could be harmful to your credit score. However, if you go about the process responsibly, you can achieve the benefits of comparison shopping without causing undue damage to your credit profile. All you have to do is be cautious and shop wisely.

About the Author: is a Content Writer at Credit Karma. Since joining the team in June 2013, he's been delivering the financial know-how on the daily. When away from work, you can find Mike watching hockey, Twittering for hours and frequenting trivia nights.

Editorial Note: The opinions you read here come from our editorial team. While compensation may affect which companies we write about and products we review, our marketing partners don't review, approve or endorse our editorial content. Our content is accurate (to the best of our knowledge) when we initially post it, but we don't guarantee the accuracy or completeness of the information provided. You can visit the company's website to get complete details about a product. See an error in an article? Use this form to report it to our editorial team. For questions about your Credit Karma account, please submit a help request to our support team.

Advertiser Disclosure: We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

All Comments

Results 1-10 of 94Results per page: 5 | 10 | 25Page 1 of 10   Previous | Next
1 Contribution
303 People Helped

Helpful to 303 out of 317 people

the whole creit score model is counterintuitive and flat out WRONG!  I have scores in the 770-790 range.  last month I paid DOWN 2 cards to ZERO balance and my AMEX bill was 2ki - light since I use it for ALL my expenses ( miles!)  I was DINGED 25points for NOT having a balance.  I spoke with a FICO rep who told me that i need to rotate 5-7 cards with minimal balances to show I can manage credit.  When i told her I manage my credit SO WELL that i only have 3 cards and NO balances, she told me that was not good enough!!  WTF????? So now, my recomendations to "help" my 752 score is to open more aco****s (swear to GOD! - thats what it says!) yet - if I open more cards, its a hard inquiry that makes my score drop!  And since I will leasing a new car next month, multiple scores will ding me (don believe the myth that multiple inquiries in a shrt time dont affect your credit negatively - ITS A LIE!)

the entire credit system is not only illegal, it is a f-ing scam!  if you have good credit, you cant access it without penalty; if your credit sux, you cant get it, except at exhorbinant rates!

Reply by
LilComadre

2 Contributions
271 People Helped
Helpful to 197 out of 205 people

I whole heartedly agree with you.  And the other scam is the car dealers who will lie to you just to get you to buy the car so they can make their hefty commission.  They will get you the "best deal" on a car loan by shopping around...to the detriment of YOUR credit score.  Go to a credit union or shop around yourself.  Get your own loan and pay them in cash; then ask for a cash discount!!!! 

Reply by
JackieThiel

2 Contributions
96 People Helped
Helpful to 85 out of 89 people

You are right! We shopped for a used car loan for two days & got hit with three hard inquires.  Two from Capital one??????  We were ar two dealerships so maybe that is why there are two capital one inquired.  Shopping in a two day window & three HARD INQUIRES

Reply by
pen777wes

1 Contribution
62 People Helped
Helpful to 62 out of 65 people

my score was damaged big time from "looking for the best loan" I was looking in to that now. That is how I found this. I am so sorry this is seriously what I call "the credit game" You must play or you lose. No ifs ands or buts about it.

Reply by
AGU

1 Contribution
0 People Helped

Hi jcali416,

Use your credit cards but pay them in full each month. Get a 2% cashback credit card. Put your credit card payment on auto-pay so you never forget.

Reply by
jaafarlending44

1 Contribution
0 People Helped

Looking for 24 hours Cash Loan, Business Loan, Payday Loan,  Small Business Loan, Personal Loan, Mortgage / Home Equity, Hard Money 

Loan and so on? 

Website: http://jaafarlending44.wix.com/jaafarlending44

Email: jaafarlending44@gmail.com

Reply by
Fidgeroo

5 Contributions
21 People Helped

Quit your whining. if you have a 770 fico no one gives a crap about your inquiries just to lease a car

Reply by
salty58

9 Contributions
59 People Helped

Also when you add new credit cards Ur overall length of credit will drop.  I agree with you it's a scam.  It's very difficult to bring and keep this score up.  I've never been hit for not having a balance, but I learned if I had one and paid it in full that helped.

Best of luck.  It's just aa number (tounge in cheek lol) and you are on the higher end.  You'll get it back.

Reply by
funandwitty1957

3 Contributions
0 People Helped

yes, sir !  It's all about a dollar. But, it's never  in our favor ! Went to the only bank on the indian rezervation where i work. wanted to open an account. The bamker also told me i could apply for a loan and to get one of their cards and it would not effect my credit. $ days later my score is down 20 points. went to the banker and told her my credit score showes 3 hard inquires. she said it is not suppose to be more than 1 soft inquiry. Wanted to borrow the money to pay my taxes on time. Never even got a call or why i couldn't borrow the smallest amount of loan the bank offered.

Reply by
DJTech1

1 Contribution
0 People Helped

You are so right .....and the point that gets me is how slow it goes up and how fast it comes down. took me three years to get to 720 and three months to loose 100 points ...also if your credit is poor they take more ( higher rates ) that's wrong.

Reply by
donnahobbs3590

3 Contributions
0 People Helped

I agree with you that credit sometime dirty and cheat and play game with credit score I cannot trust credit and play game!

Reply by
amberlynn72

1 Contribution
0 People Helped

It's true, i believed it til i leased a car and applied at several different dealerships, it DID hurt my credit score and now i am just waiting for all of them to fall off in January.. In the last 2 yrs I have not applied for any other credit pretty much because of this reason.

Reply by
Toshie003

2 Contributions
7 People Helped

So, your ****ed if you do and ****ed if you don't!  I totally get it!  I agree with you the entire credit system is a f-ing scam! 

Reply by
demnin

1 Contribution
0 People Helped

Enter Your Reply Hard inquiries WILL hurt your credit score. I was shopping around for the best rate on a home loan, not knowing this, so it's been 2 years next month before

5 inquiries roll off my credit report!!! Like I got 5 real estate loans, Are you serious?????

2 Contributions
813 People Helped

Helpful to 71 out of 72 people

I bought a new car last year (Volvo). The selling dealer pulled my credit and sent my credit request to two banks. Got 3 hard queries on my report. Still trying to figure out why selling dealer pulled my report as he did not offer credit, only the two banks, one at 3.95 percent and one at 2.95 percent. Guess dealer was just nosy. My two Credit Karma scores are 827 and 831. Want to hear a stupid story? Since 2010 I have bought 3 rental units. Had to pay cash for each unit as banks wouldn't loan to "investors." Banks said they don't fund the loans, just service them. Loans sold by banks on secondary market. Federal activities such as Freddie Mac won't touch investor loans. I even showed banks assets I own, such as annuities and equities, worth more than cost of rental units I wanted to buy. No deal. Can't get an investment loan with a 830 credit score. The whole system is warped.  I don't expect you to feel sorry for me not being able to get investment loans. Just wanted you to know that the "system" screws those with assets and good credit scores just like it does to those with limited assets and mediocre scores. It all sucks! By the way. I am 75 years old with 55 years of credit history. It doesn't get any better with age!

Credit Karma Team
Top Contributor
2949 Contributions
4777 People Helped
Helpful to 8 out of 10 people

Thank you for sharing your experience! We appreciate all perspectives. 

Reply by
j1ceasar

7 Contributions
93 People Helped
Helpful to 18 out of 19 people

you were age discriminated against - plain and simple. 

Reply by
sarahszg

1 Contribution
12 People Helped
Helpful to 12 out of 12 people

That is terrible.  They should roll out the red carpet for someone like you. All those years of investments and excellent credit and still, treated poorly. Times have changed. Thanks for sharing your story.

1 Contribution
108 People Helped

Helpful to 108 out of 120 people

Im applying for a morgage. 5months ago I bought a car and the dealership ran my credit 12 times. Obviously I would never agree to that many had they been upfront with me. I guess they were shopping for the best rate for me.  Who do I contact about getting these hard inquiries combined into 1. (or any amount less than 12). Would i talk to my morgage broker or the car dealership?

Reply by
mfellion

9 Contributions
455 People Helped
Helpful to 131 out of 153 people

Enter Your Reply  I suggest talking to your congressman and senator. The bankers have a real racket going with these hard score inquiries.  If you shop for lowest interest that lowers your score and affects your credit so the bankers can charge you more. That is a racket, pure and simple and the only real fix is legislation. 

Reply by
EmeryBoard

3 Contributions
142 People Helped
Helpful to 95 out of 100 people

You can dispute them on your credit report as " unauthroized" hard inquiry to get them removed. Only the companies you agreed to should be on your report. Use the TranUnion, Experian, & Equifax websites to dispute them online. May take up to 30 days to resolve. You can also go to the dealership and state you did not authroize all those inquiries and speak with someone in the finace dept or head mananger . Lastly your mortage company depending on what score model they use when running your credit may not even include inquires as apart of the approval process. Double check with them. 

Reply by
cococotton

1 Contribution
33 People Helped
Helpful to 33 out of 38 people

This just happened to me, better rate cost me 30 points. The finance manager told me, because I ask before he started looking for a better rate, that a law was passed to keep all the hard inquiries from damaging your credit score. Maybe law not in KY.

Reply by
mwhita5066

1 Contribution
0 People Helped

Very best thing to do BEFORE you even go to a dealership is to pre-arrange your own financing.  That way you know the rate you qualify for and the ding to your score is minimized.

The dealership want the sale, and you won't be pressured, as the financing part is where you lose if the dealer has the control.

Reply by
dbergman12

1 Contribution
0 People Helped

All I can say is, Good Luck. I had the same problem when I purchased my vehicle. Even 4-6 months after I purchased my car my credit was still being hard inquiried from different financial institutions that the dealer had requested financing quotes from. I even had an inquiry from the company that financed me three weeks after my purchase.

9 Contributions
455 People Helped

Helpful to 90 out of 106 people

Apparently the bankers have a nice little racket.  If you shop for a morgage loan they lower your score and than charge you more interest.   If you shop 1 morgage broker your score goes from excellent to good, you get to poor with 7 and no loan at all with 9 or more.  Racket is the only way to describe this way of scoring you. 

2 Contributions
44 People Helped

Helpful to 41 out of 41 people

Were purchasing a new home and we only had 1 inquiery in 2014. Now the bank that were getting the mortgage from has requested to pull 3 additional credit reports during the 6 months that we are waiting to have the house built. The same mortgage company is pulling the reports! They said that they will pull one more in December right before we get the loan approved which will put my inquireies up to 4 or 5 thus giving us a POOR rating on our credit report. So the same company that we're getting the mortgage from, is raking up the credit inquieries! How does that seem fair? When I inquiered about it, they said they have to check every 60 days...It's going to take 7-months to build the house!

Reply by
GRStro

1 Contribution
33 People Helped
Helpful to 33 out of 33 people

Same deal the the wife and I.... we did a mortgage, it took eleven months to close and they dinged a hard credit report every month, My credit dropped to 650 from 800 in that time span.... I got the mortgage and they lived with the current interest rate as laid out but, my credit actually looks horrible. 

4 Contributions
61 People Helped

Helpful to 41 out of 43 people

YES !!   There is no doubt that it affects it.  I have been trying to refinance my mortgage from 6.5%  for the last 2 yrs.  The last time  ( in May) my credit score was 733 & 694. I was denied the refinancing without any explanation and my scores dropped to  642 & 697. Unbelievable. I have been in my home for 18 yrs. & I owe less than half the value. Only $89 a month comes off the principal., the rest goes to interest & taxes.  At this rate, I will be in my 80's or dead by the time it's paid off.   The whole reason of lowering my 6.5% is so I could continue paying the same amount but the extra money would be lowering the principal faster.

Reply by
j1ceasar

7 Contributions
93 People Helped
Helpful to 27 out of 27 people

GO to your credit union and try to TALK with a mortgage lender officer there . Then if no approval. look up google " mortgage calculator" . Belive it or not the first 15 years or so - you hardly pay off ANYTHING.  See what adding $ 100 -200 a month to your principal payments will do to shorten your mortgage life.  Then AMKE SURE you  send a seperate check MArked "PRINCIPAL"  - also make sure your state by law allows early payment without penalty . and look at your statement every month ....

Reply by
paulaberger

4 Contributions
13 People Helped
Helpful to 7 out of 7 people

Dont ever apply for a refi with your mortgage company, they have NO interest at all to lower their profit. Apply for a refi with another bank, they will do whatever it takes to approve you and get your money!

1 Contribution
58 People Helped

Helpful to 58 out of 62 people

I checked the rate for a less than 10,000.00 dollar personal loan at Lending Tree and Prosper, and IT DID AFFECT MY CREDIT SCORE! How can they advertise that? It dropped from good-excellent to fair- good!! I'm also disappointed in Credit Karma that suggested Prosper would be a good choice for me!

Top Contributor

Reply by
MoonWoof

12 Contributions
52 People Helped
Helpful to 36 out of 37 people

Credit Karma gets paid by these lenders to push their financial instruments. That's why Credit Karma doesn't charge you for your credit score. They're making their money off of the card companies/lenders.Enter Your Reply

Reply by
wimb

2 Contributions
13 People Helped
Helpful to 13 out of 13 people

That happened to me alo. I have learned my lesson going through lending tree. It plainly states this will not affect your score and sure enough, you will see hard inquiries from all of these companies.  i did not authorize them, but they still decline removing them. Credit is so hard to manage. When you think you are doing the right thing, it turns out that you are not.

1 Contribution
25 People Helped

Helpful to 25 out of 25 people

Yes I have been using credit karma for seven months and have gone from 580 to 690 and climbing. It's like everything else in life everone has different needs.  so you have to take each suggestion they give you decide if it is really your best move.  It's like a chess game.  They are showing you some good moves but you still have to decide on the right ones.

Reply by
Renai966

1 Contribution
9 People Helped
Helpful to 9 out of 10 people

I have also been using credit Karma and watching my score grow, downside I tested the numbers with a mortgage lender only to find out credit Karma's numbers were incorrect. Now I'm confused and frustrated because I want a mortgage.

1 Contribution
38 People Helped

Helpful to 38 out of 42 people

Bought a car in sept of 2014.transunion shows 1 inquiry and equifax shows 6.all from dealer.can anything be done?

Reply by
jersey2go

1 Contribution
32 People Helped
Helpful to 32 out of 38 people

Dispute it, you only gave permission at the dealer, not the others

Reply by
salty58

9 Contributions
59 People Helped
Helpful to 2 out of 2 people

Not much other than time passing then they will fall off.  It depends what part of the country your in as to which credit report is going to show these hits ( I'm guessing you know that).  What happened to you is typical when buying a car. 

Best of luck to ya.

Reply by
mjnl0823

1 Contribution
12 People Helped
Helpful to 12 out of 14 people

 When buying a car, you can choice who does your loan and beleiv it or not, you rate. I've done it. The first car I bought they hit me with 6 inquiries and told me that Ally Financial was the best rate. 3.99. So when I went to buy another car a few years later, I told them that I wanted the loan with Ally Financial and and I'm not buying the car unless your lower my rate by 1 point. And they had no choice but to do it. Cause the dealership makes the deal and they sale your deal to a Financial institution. You can get the loan yourself from your credit union and ask for a cash discount or you cna tell them who you want to service your loan and how much interest rate you are willing to accept. They are so hungry for the sale, believe me... you will get it. That entire car dealership negotiation is all BS.. My credit wasn't that great and I got a 35K car with a 2.99 interest rate. 

9 Contributions
188 People Helped

Helpful to 22 out of 22 people

In Louisiana it is not uncommon for a dealer to ask 7-8 companies to pull your credit report.  Problem is there is no written law to prevent 8 hard inquiries to show up on your report for the purchase of one vehicle  I have bought 2 in the last 8 months and have 17 hard inquiries on my report.

Reply by
j1ceasar

7 Contributions
93 People Helped
Helpful to 9 out of 9 people

get your own loan - IE capital one is great online - OR go to credit union FIRST .... so only ONE inquiry ....

Top Contributor

Reply by
cjmeller

10 Contributions
9 People Helped
Helpful to 6 out of 6 people

I would echo this.  and if you plan to do your financing through the car company (ie- Ford Motor Credit), then do the application online ahead of time.  I walked into the dealership FMC approved and approved by Lightstream for 1.74% so it just came down to interest rate.

One thing of note, inquiries only makeup a small part of your credit score.  My inquiries are poor for the year because I refinanced student loans, upgraded my credit cards, purchased a new home (and sold my old one) and now just purchased a new vehicle.  My credit age rating isn't great either as I just got new cards (and have been working over the past 5 years to get my credit into shape).  I still had zero problems getting a great rate on my student loan refi, mortgage and car loan as my credit utilzation is in the sweet spot (7%) and I have no deliquencies. 

Inquiries alone will not limit your access to credit.  Late payments and utilization are the two biggest factors.

Results 1-10 of 94Results per page: 5 | 10 | 25Page 1 of 10   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Comment on this Article

Write your comment:
Enter Your Comments