Lenders check your credit when you apply for credit. If you are looking to buy furniture on credit, buy a new car, get a mortgage on a new home, your credit is reviewed. When the lender pulls your credit report it is considered an inquiry. Those inquiries count against you on your credit report.

They count against you because lenders think that you are looking around for credit and if you get all of the credit you may be a bigger risk. That risk relates into a problem for you. The credit bureaus will count that risk into their calculations on your credit score. Because it is a negative risk, it so reflects on your credit report.

Some people say that inquiries don’t hurt your score and other say they only affect your credit score a little. But they can affect your credit score and if you have a lot of inquiries, you will see a definite change in your credit score.

So try to keep your inquiries down. If you need a car, then I suggest that you apply for any automobile loans all at one time. This will give you several inquiries all at once and will appear that you are “shopping” for a car loan. When the bureaus see a group of inquiries all at one time they group them together and they do about as much damage as 1 inquiry rather than several.

The same is true for other things as well, such as a Home Mortgage. If you apply at several mortgage places and they all run your credit, it will appear that you were shopping for a Home mortgage. The damage is greatly reduced.

Just remember if you get accepted for all that credit, you will have a new problem. You will have a lot of “new credit”. This new credit will lower your score (because of the age of the account(s) and raise your available credit limit (in comparison with your income). But if you see any hard inquiries (the ones that count against you) that you did not apply for, dispute them and do the credit repair.

Myth: Multiple Car Loan inquiries hurt your credit score more than one inquiry.

Fact: The credit bureaus treat these as one inquiry if they are made within a few weeks of obtaining an auto loan.

We often get questions and concerns about completing multiple car loan applications because people believe that completing more than one application will damage their credit score. This is NOT true. Multiple auto loan inquiries within a few weeks will NOT impact your score anymore than completing one application. The same holds true for mortgage and student loans. Inquiries like these are not treated the same as inquiries to open multiple credit card, store accounts, and other typical revolving credit types which historically pose a great credit risk.

According to MyFico.com, the credit bureaus understand that consumers are shopping for the best rates. They will not penalize someone who is obviously comparison shopping before they obtain their auto loan. Furthermore, when consumers are shopping for a car loan the amount their credit score drops tends to be less than 5 points for most people.

Remember, the most important factor for credit scores is paying bills on time. Continuing to do so will go a long way in improving a credit score and being able to get the best interest rates and offers.

Use this to your advantage to find the best loan interest rates you can. A little bit of effort can go a long way in saving you on your car loan monthly payments.