A common worry for those shopping for a car loan is that running their credit will severely or permanently damage their score. We talk to customers all the time that want to get specific details on the types of loans they qualify for without running their credit. They are reluctant to perform a credit application because they believe that a credit inquiry will lower their credit score. 

First, it’s important to note that all credit checks are not the same. Checking your own credit does not affect your credit score at all. When you go to any one of the credit bureaus for an inquiry on your personal credit history, there is absolutely no negative impact whatsoever. This common myth has been debunked countless times by credit experts. Any consumer that would like to keep track of their credit can and should pull their Equifax, Experian and Trans Union credit reports for free once a year at AnnualCreditReport.com

For credit inquiries performed to obtain a car loan, experts and FICO have plainly stated that unless you are running many inquires within a short period of time, your credit will not be affected by shopping for loans. Even when you run the many inquires necessary to have an effect on your score, that effect is minimal and temporary.

FICO has released information about how credit scores are calculated and based off of the information made public, FICO is more concerned with consumers opening multiple credit lines in a short period of time, and even this kind of activity makes up barely 10% of your score.  Research shows that FICO can actually predict when people are running credit to loan shop. Fico can predict the types of inquires where consumers are likely shopping for rates like mortgages, auto loans and student loans and will ignore those types of requests.  Most consumers’ scores are not affected at all by this type of activity.


Even considering the remote possibility of a temporary dip in your credit score due to rate shopping, it's still less expensive than over paying for an auto loan. For consumers looking to obtain a bad credit auto loan, shopping around may be unavoidable in order to find a dealership that will give you a chance.  Paying an installment loan like one for an automobile is one of the best ways to rebuild credit.


Credit experts agree that that the benefits of shopping around for a loan far outweigh the possible minimal and temporary harm of running your credit a few times. The most important items FICO considers when calculating your credit score is paying your bills on time and having minimal debt and if you’re looking to maintain or rebuild your score catering to these categories is the only sure way to have a serious effect on your score.