Question: Can A Car Dealership Hurt Your Credit??

When a car dealership shotguns a loan application, they send it to many different lenders with which the dealership has relationships.

Because credit scoring systems count multiple auto loan inquiries as a single inquiry, shotgunning does not affect a person’s ability to qualify for credit.

What happens when a car dealership runs your credit without permission?

A dealership’s finance and insurance manager (or other dealership personnel) cannot run your credit report without your permission and must ask for your signature or verbal permission. A car salesman may try to run your credit report as soon as you step on the car lot.

How much does your credit score go down when you apply for a car loan?

A single credit inquiry generally has little impact on your credit scores. One inquiry might drop your score 2 to 7 points or so. And multiple inquiries created as a result of shopping for an auto loan are not supposed to hurt your credit scores significantly if you limit your shopping to a short window of time.

How do car dealers check your credit?

With your consent, the dealer’s finance department provides your information from the application to the credit bureaus. When a dealer pulls your credit report, it’s known as a “hard pull.” Although a hard credit inquiry can lower your score, the impact is usually minimal.

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