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Will applying for a car loan at a dealership hurt my credit score?
Is it true that applying for a car loan at a dealership hurts your credit score? I want to finance a car through the dealer, as they're offering a 1.9% APR promotional deal. However, I've heard that applying for financing through a dealership can hurt your credit.
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“When you apply for
financing
, the dealer will run your credit report. This is known as a hard inquiry.When you get a hard inquiry on your credit, it can lower your
credit score
by around 10 points, but rarely more than that.So yes, it will hurt your credit, but it’s only temporary and will rarely have an impact on what interest rate they offer you.
Keep in mind that any loan application will have an effect on your credit, whether it be at a dealership or your bank.”
View full answer
- Gregory R.
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