Will getting rejected for a car loan hurt my credit?

Answered by Car Loans Expert Jim on April 5, 2021

My credit score is already kind of blah. I don't know if it can handle another blow.

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Jim

Car Loans Expert

“Technically, the answer is no. The fact that you have been declined for a loan does not, in and of itself, impact your credit.

The bad news is that while the denied application has no impact, the inquiry the lender used to review your credit report may have a negative consequence. When you apply for a loan, the lender makes what is called a “hard inquiry” on your credit. A hard inquiry can have a negative impact on your credit score, though the impact usually lasts for just a few months.

What helps soften the blow is that credit-scoring models allow for a window of 14 to 45 days when multiple hard inquiries for the same type of loan are considered to be one. This is because they understand that borrowers need to shop around and apply for multiple products to get the best rate. “


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