However, most credit bureaus combine multiple inquiries so that they only count as one. That’s the effect of lenders performing a hard credit check, which allows them to calculate your interest rate and other loan terms.Īny credit inquiries that are made for an auto loan will appear on your report. Initially, you might see your credit score drop slightly. The act of opening a car loan will impact your credit score. Looking for an auto loan that works for you? Easily compare rates from lenders below. However, you can use the car loan to help increase your score by making on-time payments. So, does a car loan build credit or does it cause your score to drop?īy itself, a car loan does not build credit.
Drivers who are looking to get an auto loan often want to know how it's going to affect their credit.
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