How Rate Shopping Affects Your Credit Score

When seeking a single loan to purchase a new home or an auto, it’s possible that several lenders will end up inquiring about your credit report. Because multiple inquires made in a short time period could adversely affect your credit score, many of these inquiries are ignored. So go ahead and shop for the best rate you can find. And remember, all inquires from either of these industries dating up to 30 days back from the date of scoring will be ignored for score calculation purposes.

Vehicle and mortgage inquires made more than 30 days since the date of scoring are handled a little differently provided they fall into what has been defined for score calculation purposes as a shopping period. A shopping period varies depending on which FICO scoring formulas is used. Older formulas define a shopping period as a 14-day period (which translates to about 45 days after the date of scoring) while the newer formula defines it as a 45-day period (60 days after the date of scoring).

Multiple auto and mortgage inquiries made during either of these “shopping periods” are counted as just one inquiry for credit scoring purposes. Lenders can choose whether they want the credit bureau to use the shorter shopping period or the longer when calculating FICO credit scores.