Car loans begin to affect your credit long before you start making, or not making, your monthly payments. Auto loan shopping does have an impact on your credit rating, as does the loan’s initial approval and disbursement. You should be aware of that credit impact before you start looking for the best auto loan for you. 
The Impact of Loan Shopping
Loan shopping involves gathering auto financing offers from your top lender choices. The only way to get an accurate loan offer is by allowing each potential lender access to your credit report. When a lender checks your credit report and scores, your score will be lowered minimally. One credit inquiry has a negligible impact on your credit score, but several can begin to become a noticeably negative influence on your credit profile. Those with high credit scores, above 675, shouldn't be at all concerned about the effects of these inquiries. However, someone trying to build credit from a previously poor or limited history should make themselves aware of any potential credit score impact. For this reason, you should be well prepared for the loan shopping process before it begins.
Narrow the Field
The first step in minimizing the potential negative credit impact of shopping for car loan offers is narrowing your field of lender choices before you start gathering term quotes. Some car buyers make the mistake of having too many lenders run their credit in order to get a quote, when a bit of homework could have removed one or more of those lenders from the running. A combination of research and referrals can help you eliminate some of the auto financing options available to you before you give anyone permission to pull your credit report.
Expediency is Key
The amount of time that passes between credit inquiries from auto lenders plays a part in whether or not your credit scores will be negatively impacted. The credit reporting agencies are aware of the need for loan shopping and take that into account when determining how the involved inquiries affect your various scores. The exact amount of time varies slightly between each of the credit bureaus, but the recommended amount of time to spend shopping for loans is between two and four weeks. The inquiries made by the lenders you are considering will be grouped together and counted as a single credit report check, instead of several, given you haven’t allowed too much time to pass between each check.
Auto loan shopping is a necessary part of finding the ideal financing option for the purchase of a car. Credit reporting agencies take the importance of consumers shopping for loans into consideration and have worked a time-frame of inquiry impact leniency into how your scores are calculated. Do your research and shop for your auto loan in a timely manner.
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