Dear Driving for Dollars,
Does applying for an auto loan affect your credit score?
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.