Dear Driving for Dollars, Does applying for an auto loan affect your credit score? -- KennethDear Kenneth, Applying for an auto loan counts as an "inquiry" on your credit report. While the number of inquiries is a factor in your credit score, it generally has a relatively small impact, with elements such as past payment history and use of credit receiving much more weight in the score. If you make multiple applications for a car loan within a 45-day window, it lessens the impact because most of the credit bureaus realize you're shopping for a car loan.Tara Baukus Mello is a freelance writer who has written about automotive topics of interest to consumers since 1995. If you have a car question, e-mail it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories.This week:Can GM's 60-day guarantee draw buyers?Does car loan inquiry hurt credit score Create a news alert for "auto" advertisementRelated Links:Tokyo show brings out concept carsIf I trade year-old car, will I lose money?National auto loan averagesRelated Articles:Certified cars offer peace of mind6 car-shopping mistakes5 great used cars for bargain hunters
Dear Driving for Dollars, Does applying for an auto loan affect your credit score? -- Kenneth
Dear Kenneth, Applying for an auto loan counts as an "inquiry" on your credit report. While the number of inquiries is a factor in your credit score, it generally has a relatively small impact, with elements such as past payment history and use of credit receiving much more weight in the score. If you make multiple applications for a car loan within a 45-day window, it lessens the impact because most of the credit bureaus realize you're shopping for a car loan.
Tara Baukus Mello is a freelance writer who has written about automotive topics of interest to consumers since 1995. If you have a car question, e-mail it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories.
Create a news alert for "auto"