Shopping for the Best Rate will NOT Hurt Your Credit Score

This is the least known myth and as a result it causes the most frustration and anxiety.

The FICO formula recognizes that as a smart consumer you should be able to shop for the best rate and find the best loan options that meet your needs. The credit score formula looks at all mortgage and auto loan inquiries in your credit history for the last 30 days and treats them as one inquiry per loan type. In other words, your credit score calculation will count all mortgage loan inquiries in the last 30 days as one and/or all car loan inquiries in the last 30 days as one auto loan inquiry.

Reputable Internet based car loan and mortgage loan services take this into account. They know that your credit score is protected and are able to quickly and efficiently find suitable car loans or mortgage loans for people with bad credit by levergaing their lending networks. For example, according to Web2Carz.com, a car shopping and car loan service site catering to consumers with bad credit, they help over 1,500 car loan applicants per day find a much needed car loan. Not all internet based services are the same so do your homework. You can also visit our Tools and Services section for a list of recommended companies..

Please note that the FICO formula only gives auto loan and mortgage loan inquiries this special treatment. Other inquiries into your credit history such as the ones for credit card applications will count as individual credit score pulls and subsequently might have a very negative impact on your overall credit score.