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Credit inquiries from shopping for a car loan

I have a question about how credit ratings are dinged by inquiries with lenders - car loans. My understanding is that lenders will check credit scores before saying how much they will charge on a loan. I would like to shop around as to who will offer me the best rate, however, I don't want my credit score to keep decreasing because of my searching for the best offer. I heard at one time that if you are shopping for the same thing be it a car or home your credit score would not be dinged every time??? Today, I was told by the car dealer that my credit rating will be dinged very time - a credit report is pulled up.

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Credit inquiries from shopping for a car loan

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Sep 22, 2009
 Car shopping and credit scores
by: Gerri

It is true that a hard inquiry will be created on your credit report every time a car dealer or mortgage company checks your credit report. If the financing company checks one credit report, the inquiry will appear on that report (Equifax, Experian or Trans Union).

However, for purposes of calculating your FICO credit score, auto loan or mortgage inquiries in the past 30 days are ignored, and beyond that time period multiple inquiries within 14 days (or 45 days for the newer FICO models) are counted as one.

That said, I would recommend you shop for your auto loan before you go to the dealerships. Do not let dealers pull your credit report until you decide you are going to buy a car from them, and then when you do, you are just letting them see if they can beat your best offer that you already lined up for financing.

Good luck!

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