You know the importance of a solid credit score, and the basics of how to keep it in the ‘good’ category (pay on time, don’t miss payments). What you may not be aware of is the fact that credit inquiries — even if you initiated them — do have an impact on your score.
When you’re shopping for a big-ticket item such as a car, home, or other major purchase, lenders check your credit. Each time they do, your score can drop. Though the change is typically small, multiple inquiries can add up to a big change in your score.
Luckily, there are ways to protect your credit score while seeking a vehicle loan. Here’s how to do it:
Know the Impact
The fact is that the credit reporting agencies typically count multiple inquiries within a certain time as one. They realize that when you’re shopping around for the best deal, you’re likely exploring all options, which results in many requests for access to your credit report.
Typically, inquiries made within 14 days will be counted as one. However, they will still show up as individual entries on your credit report, so you can keep track of who’s accessing your information. These requests can stay on your report for up to two years.
It’s also important to know the difference between a hard and soft inquiry. Essentially, hard inquiries are when lenders are trying to decide whether to lend to you. Soft inquiries usually involve a series of questions aimed at finding out which deals and offers are best for you, based on the current state of your finances.
Minimize the Effect
Timing is essential to protect your credit score. As earlier mentioned, the credit reporting bureaus usually understand when consumers are shopping for deals, and regard multiple inquiries in the same category as one inquiry.
It’s also helpful to do some research on your own. There are many websites where you can check rates and glean valuable information without ever having to provide personal details. This keeps your credit score untouched. Another option is to target companies directly and apply only to those outlets you feel might be a good fit for your needs.
Explore Other Options
It’s also important to realize that the banks aren’t your only option for buying or selling personal items, including vehicles. At Auto Pawn, we use a multi-point approach to assess the value of your vehicle, and then make a generous offer based on that information. By doing it this way, you don’t need perfect credit to qualify!
Unlike some options that can be shady and even dangerous, we’re a trusted and respected Central Florida business, so you can be sure that you’re always getting a good deal, and working with honest, reputable, qualified, and knowledgeable professionals.
For years, we’ve been able to offer top dollar for many types of vehicles, including cars and trucks, boats, RVs, and more. Some of our deals are up to $100,000! Stop by any of our three convenient Volusia County locations today to discover what makes us different.