Will Multiple Loan Applications Ruin My Credit ?

Not anymore.

How it works: for each car loan application you submit there will be a credit check or inquiry.  Additionally, common practice is for dealerships to submit your credit information to multiple banks and for each bank there will be an inquiry.

Dealers are trying to find the best possible deal when they do this, but without telling the customer how it affects their credit we can run into problems.

New credit reporting laws mean shoppers now have a 14 day period where all of the inquiries will count as 1 overall inquiry. Regardless of the number of inquiries, when a shoppers’ credit is “refreshed” each month, all of those inquiries will only appear as 1 inquiry on the credit statement, under New Car Loan.

In my experience it takes only takes 1 reporting cycle for the system to correct this. So the day after you go to dealership your credit score might show 7 inquiries, but the next month when your credit report is updated it will only show 1.

If you are sure you are going to buy a car don’t worry about going a little overboard on trying to find the best loan by looking around. If you purchase a vehicle 1 inquiry leading to 1 purchase is certainly not going to be a red mark on your credit report.


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