Learn how Auto Loan Credit Inquiries impact your credit report.
Did you know…FICO score considers all inquiries within a 45 day period for an auto loan as a single inquiry.
Ever wondered…Hey, what’s the difference between a hard inquiry and a soft inquiry on my credit report?
Well, here are some answers.
When someone checks your credit report, it’s called an inquiry. Some inquires do not affect your credit, while others might.
Soft Inquiries
Lenders do not see soft inquiries when they order your credit report. Soft inquiries include:
- Pre-screened offers for credit (example: free credit card offers)
- Account reviews by your existing lenders
- Requests related to employment
- Requests for insurance purposes
- When you request your own credit report
Hard Inquiries
Hard inquiries typically come from a lender or other creditor who wants to check your credit report as a result of your loan application or request for credit, goods or services. These inquiries are shared with other lenders viewing the report and can have an impact on credit scores and lending decisions.
Multiple Inquiries
One exception occurs when you are “shopping”. FICO score considers all inquiries within a 45 day period for an auto loan as a single inquiry. You can avoid lowering your FICO Score by doing your all your serious auto hunting within a short period of time.
Looking for an Auto Loan?
We can help!
It’s common for Ron Westphal Chevrolet 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.
Lenders recognize that shopping for only one car and does not mean you are trying to open multiple new accounts. Credit scoring systems have been designed to account for that practice and include rules such as counting the same type of inquiry as only one inquiry as long as they are made within a short period of time.
Call our Finance Department at 630-898-9630. We will be happy to provide you with additional information in English or Spanish. Or, visit our website.
What is the ‘FICO Score’
A FICO score is a type of credit score created by the Fair Isaac Corporation. Lenders use borrowers’ FICO scores along with other details on borrowers’ credit reports to assess credit risk and determine whether to extend credit. FICO scores take into account various factors in five areas to determine credit worthiness: payment history, current level of indebtedness, types of credit used, length of credit history and new credit accounts.
Source: Experian.com and Fico.com
Read more: FICO Score Definition | Investopedia http://www.investopedia.com/terms/f/ficoscore.asp#ixzz4Vpp98X1I