Money Talks, So Should You

Q&A: Does applying for a car loan impact my credit score?

Danielle Seurkamp
by Danielle Seurkamp, NAPFA (@dseurkampcfp)

Applying for any type of loan is going to result in an inquiry on your credit report. An inquiry might shave a few points off your score, but shouldn’t have a meaningful impact.

Luckily, most credit bureaus treat multiple inquiries within a short time frame as one inquiry, so if you are shopping around for loans it shouldn’t have an adverse effect on your credit score.

READ: How used cars can save you money?

Ultimately, inquiries for car and home loans should have a smaller impact than other factors that go into your score, like payment history and length of credit history.

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Danielle Seurkamp works as a certified financial planner for Foster & Motley. Seurkamp is a member of the National Association of Personal Finance Advisors (NAPFA), a fee-only professional association and a Dimespring knowledge partner.