In NB, what should I know about soft vs hard inquiries for car loans?

In New Brunswick, understanding the distinction between soft and hard credit inquiries is vital for anyone applying for a car loan. A soft inquiry, often initiated when you check your own credit score or a lender performs a pre-qualification check without a formal application, does not impact your credit score and is not visible to other lenders. These are valuable for assessing your eligibility and potential rates without commitment. Conversely, a hard inquiry occurs when you formally apply for a car loan, and the lender requests your full credit report to make a definitive lending decision. Each hard inquiry can cause a slight, temporary dip in your credit score, but Canadian credit bureaus like Equifax and TransUnion have a specific rule for rate shopping: multiple hard inquiries for the same type of loan, such as an auto loan, within a concentrated window (typically 30 to 45 days), are usually grouped and treated as a single inquiry for scoring purposes. This crucial rule allows consumers in NB, and across Canada, to shop for the best interest rates without unduly penalizing their credit score. Why this matters: strategically managing your inquiries ensures your credit profile remains strong, which is paramount for securing the most favorable interest rates and terms in the competitive 2025 automotive finance market, where even small differences in rates can significantly impact the total cost of your loan.