If you have decided to purchase a new car and will be financing it, you want to make sure you are getting the best deal possible. This doesn’t mean just the best deal on the car itself, but the best interest rates as well. So you may be tempted to shop around from dealership to dealership to get the best rates. However, you have also heard that multiple credit inquiries hurt your credit score. In this post I’m going to dispel some rumors and discuss whether or not shopping for a better interest rate hurts your credit.

When your credit is checked by a credit card company who wants to offer you a credit card, it’s called a soft inquiry. These do not affect your credit. But when your credit is checked at a car dealership this is referred to as a hard inquiry and does affect your credit.

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Unbelievably, sometimes it may be easier to get a loan for a car when you have bad credit rather than not having credit at all. This is why it is imperative that you use your credit wisely as early as you can. For young people, they can be added to their parents credit card or they can get their own cell phone. Just something that establishes that they are responsible at making monthly payments on time.

However for many young people getting a car is the first time they’ve really needed to use their credit. But there’s no need to worry, there are still ways to get a car loan without having first established a long credit history. Here is how it can be done.

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