Multiple Inquiries When Shopping for a Car Loan

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Dear Experian,

I went car shopping one day and now there are lots of inquires that say they will be on my credit report. Is it right for all these inquiries to be on my report so long from just one day of shopping for a car?

— RLM

Dear RLM,

When shopping for a car, it is common for auto dealers to submit your information to multiple lenders in an effort to find the lowest interest rate and most favorable loan terms. This practice allows you to benefit from lenders competing for your business. The same practice is used for mortgage lending. Each time your credit report is reviewed by a different lender, an inquiry will appear showing who accessed the report and for what purpose.

Experian lists each inquiry into your credit file for two years, so that you have a complete record of who has reviewed your credit history. That said, car loan and mortgage inquiries made within a short period of time will only be counted as one inquiry when calculating your scores. Read on to find out why.

Most Credit Scores Will Count Multiple Car Loan Inquiries As One

Lenders know that multiple applications for a car loan within a short period of time indicate you are shopping for the best terms, not buying multiple cars. Scoring systems have been designed to reflect that reality.

Therefore, as long as the inquiries were all made within a certain period of time, usually 14 days but sometimes longer, they are counted as just one when calculating your score.

The practice of counting multiple auto loan inquiries as just one enables you to shop for the best rates and terms without hurting your credit scores. The same applies when shopping for a mortgage loan.

However, each inquiry made will still appear individually on your credit report so that you have a complete record of who has accessed it. At Experian, inquiries remain on the credit report for two years.

How Inquiries Impact Your Credit Rating

For other types of credit, lenders may view multiple recent applications as a sign of risk, so it's best to keep inquiries to a minimum by applying only when you really need it. Although too many recent inquiries can have some negative impact on your credit rating, that impact is typically small and temporary.

While inquiries remain part of your credit report for two years, the longer ago they occurred, the less they will affect you. If your credit history is good overall, it's unlikely that your application would be declined based on inquiries alone.

Thanks for asking,
Jennifer White, Consumer Education Specialist

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