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Chapter 4. Credit Scoring Myths > Myth 4: You Can Hurt Your Score By Shopping A...

Myth 4: You Can Hurt Your Score By Shopping Around for the Best Rates

The folks propagating this particular myth might have an ulterior motive. After all, if you don't know what the competition is offering, how will you know if you got a good deal?

Creators of scoring formulas know that smart consumers want to shop around for the best rates, particularly on cars and homes. That's why the FICO formula lumps all mortgage- and auto-related inquiries made within 14 days and counts it as one inquiry. Furthermore, any inquiries made in the 30 days before the score is created are ignored. If you do your shopping for a car loan or mortgage in a concentrated period of time and get the loan before the 30-day window is up, you should be fine. Even if it takes a little longer than 30 days to get your loan approved, as often happens with mortgages, you should be okay if your rate-shopping was confined to a two-week period.


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