Protecting Your Credit Score While Shopping for a Car

Shopping for a car can be exciting, but it’s also one of the fastest ways to damage your credit score if you’re not strategic. Between multiple lender inquiries, financing traps, and pre-approval missteps, consumers often expose themselves to avoidable hits on their credit profile.

Fortunately, it’s possible to protect your credit score while car shopping, if you understand how the credit system works and take a few key precautions.

How Car Shopping Affects Your Credit Score

Car dealerships typically partner with several lenders to secure financing for buyers. When you apply for a loan, the lender pulls your credit report to assess risk. This is known as a “hard inquiry,” and too many of these within a short period can lower your score.

That said, credit scoring models like FICO and VantageScore recognize that rate shopping is a normal part of major purchases. If multiple auto loan inquiries occur within a short window, typically 14 to 45 days, they’re treated as one inquiry for scoring purposes.

The problem: Most buyers don’t realize how that window works or how to control when and how their credit is accessed.

5 Ways to Protect Your Credit Score

1. Get Preapproved Before Visiting Dealerships

Obtain a preapproval from your bank or credit union before engaging with dealer financing. This not only gives you leverage but also limits how often your credit is pulled. Some reputable dealers, like Carlantic, will work with preapproved buyers and won’t shotgun your application to multiple lenders without permission.

2. Limit Your Credit Inquiries to a 14-Day Window

While credit models may allow up to 45 days for rate shopping, some lenders use older scoring models that only offer 14. To be safe, limit all loan applications to a two-week period.

3. Don’t Apply for New Credit Before or After Car Shopping

Every new credit application, credit cards, personal loans, store financing, can lower your score or raise red flags to auto lenders. Avoid taking on new credit obligations 60 days before and after purchasing your vehicle.

4. Know What’s in Your Credit Report

Before applying for an auto loan, review your credit reports from Experian, Equifax, and TransUnion at AnnualCreditReport.com. Dispute any inaccuracies or outdated information.

A score above 700 gives you access to favorable rates. Below 640, you may be seen as subprime, resulting in higher interest, more aggressive lender behavior, and potentially predatory loan terms.

5. Don’t Let Dealerships Pull Credit Without Consent

This is where many shoppers lose control. Unscrupulous dealerships may submit your application to a dozen lenders at once to “find the best rate,” triggering multiple hard pulls. Ask upfront: how many lenders will be contacted, and when? A legitimate dealer will wait for your approval or use soft pulls when possible.

Used Car Buyers: Double the Risk, Double the Vigilance

If you’re buying a pre-owned vehicle, the credit risks are often higher. Subprime lenders dominate the used car financing space. Terms can be unfavorable, and approvals are often conditional on multiple pulls.

When shopping for used cars in Halifax, look for dealers with in-house financing transparency, clean F&I practices, and a clear limit on how credit inquiries are handled.

FAQs

How many points does a car loan inquiry drop my score?

Typically 3–5 points per hard pull, but rate shopping within 14 days usually counts as one.

Q: Will checking my own credit hurt my score?

No. Personal credit checks are “soft” inquiries and have no impact.

Should I avoid financing through dealerships altogether?

Not necessarily. Just ensure you understand how many lenders they’ll contact and compare their offer with your bank’s.

Q: Can I ask a dealer to use a soft pull?

Some dealers may offer soft-pull prequalifications through fintech platforms. These don’t impact your score and can give you estimated terms.

Is it better to finance through a credit union?

Often yes. Credit unions usually offer lower rates and more flexible underwriting than dealer-arranged loans.

Final Word

Car shopping shouldn’t cost you your credit health. By getting preapproved, staying within the rate-shopping window, and protecting your credit from unnecessary pulls, you can shop smart, and score well.

Working with trusted partners like Carlantic and doing your homework when buying used cars in Halifax can help you drive off with peace of mind, not just a new set of wheels.