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

In Ontario, distinguishing between soft and hard inquiries is vital when navigating car loan applications. A soft inquiry, often initiated for pre-approvals or when you check your own credit score, does not affect your credit score and is invisible to other lenders. These are valuable for gauging your eligibility and potential rates without commitment, allowing you to explore options risk-free.

Conversely, a hard inquiry occurs when you formally apply for a car loan, prompting a lender to pull your full credit report. This action typically results in a temporary, minor dip in your credit score and remains on your report for two to three years. However, a critical nuance for auto financing in Canada is the 'rate shopping window': major credit bureaus like Equifax and TransUnion generally treat multiple hard inquiries for the same type of loan, such as a car loan, made within a concentrated period (commonly 14 to 45 days, often 30 days for auto loans) as a single inquiry. This 'why it matters' aspect empowers consumers in Ontario to confidently shop around with several lenders to compare interest rates and terms, ensuring they secure the most competitive financing deal without undue credit score damage, potentially saving significant money over the loan's term.

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