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

In Quebec, as across Canada, understanding the distinction between soft and hard inquiries is crucial when navigating car loan applications. Soft inquiries, often called 'soft pulls,' occur when a lender performs a preliminary credit check, typically for pre-approvals, identity verification, or by existing creditors monitoring accounts. These checks do not impact your credit score, are usually invisible to other lenders, and serve to give you an idea of your eligibility without commitment.

Conversely, a hard inquiry, or 'hard pull,' happens when you formally apply for a car loan, granting a lender permission to access your full credit report. Each hard inquiry can temporarily lower your credit score by a few points and remains visible to other lenders for a period, typically two years. However, a critical nuance for car loans in Canada, including Quebec, is the 'rate shopping window.' Credit scoring models, such as those used by Equifax and TransUnion, recognize that consumers shop for the best rates. Therefore, multiple hard inquiries for the same type of loan (e.g., auto financing) made within a concentrated period, usually 14 to 45 days (often treated as 30 days by many models), are typically grouped and counted as a single inquiry. This mechanism is designed to allow consumers to compare offers from various lenders without unduly penalizing their credit score for seeking the most competitive terms. Why this matters is that it empowers you to confidently shop around for the best interest rates on your car loan in 2025, ensuring you secure the most favourable financing without fear of multiple hits damaging your credit profile, provided you keep your applications within that specified window.