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Reply To: Does Navy Federal Preapproval Auto Loan Affect Credit Score?

#258265
Grace Young
Keymaster

When you fill in a pre-loan application, all the creditors will check your credit history. However, this isn’t the case with Navy Federal. They perform an alternative so-called ‘soft’ check on the credit history, which does not affect the credit score. Therefore, you can check out the possibilities without fearing a credit hit.

But when you apply for the loan and Navy Federal’ hard’ checks your credit, it will likely negatively affect your score, but only slightly. This is the practice expected in the lending business.

What Is a Navy Federal Preapproval Auto Loan?

A Navy Federal preapproval auto loan estimates how much you can borrow before you visit a dealership. This process helps you understand your budget, know what kind of car you can afford, and have an edge when negotiating with car sellers. The preapproval doesn’t guarantee you’ll get the loan but provides a clearer picture of your financing options.

Does Getting Pre-Approved for an Auto Loan Affect Your Credit?

No, Navy Federal’s preapproval process does not harm your credit score. This is because Navy Federal performs a soft credit inquiry. A soft inquiry is a quick, non-intrusive review of your credit history and doesn’t leave a mark on your credit report. It’s like a credit check you do on yourself, which doesn’t impact your credit score.

How does the Navy Federal Perform Credit Checks for Preapproval?

When you apply for preapproval with Navy Federal, they conduct a soft inquiry to assess your credit. The process requires basic information, such as your housing details, employment status, income, and loan preferences (amount, length, and trade-in). You can apply online, over the phone, or at a Navy Federal branch.

While preapproval doesn’t affect your credit, how you handle the loan afterward can affect it. For instance, Navy Federal reports your payments to major credit bureaus. Making timely payments can boost your credit score, while missed payments can negatively affect it.

Hard vs. Soft Credit Inquiries for Auto Loan Preapproval

Credit checks generally fall into two categories: hard and soft inquiries. A hard inquiry happens when you formally apply for a loan or credit card, which can lower your credit score slightly.

However, Navy Federal’s preapproval process uses a soft inquiry, which doesn’t affect your credit score because it’s not tied to an active loan application. This makes preapproval a risk-free step toward buying a car.

Managing Your Credit During the Auto Loan Process

Once you’re pre-approved, managing your credit responsibly becomes key. Even though the preapproval doesn’t affect your credit score, the loan application and subsequent payments do.
Ensure you make timely payments, keep your debt-to-income ratio low, and monitor your credit report for any changes. These practices will help you maintain or improve your credit score during and after the loan process.

Read related blogs: What is a Good Credit Score: Understanding Creditworthiness

Conclusion

To conclude, getting preapproved for Navy Federal auto loans has no adverse effect on your credit score since it only entails soft credit inquiries. Many people find Navy Federal’s preapproval process for a car purchase beneficial since it lets them know how much they can spend without affecting their credit until they officially apply for the loan.

Beem app offers top options for car insurance, home, and personal loans. To protect your finances, always control your credit correctly during the whole deal.

People Also Ask

Is Navy Federal preapproval a soft pull?

Yes, Navy Federal’s preapproval process involves a soft pull, which means it doesn’t affect your credit score.

Does getting pre-approved hurt your credit score?

Preapproval with Navy Federal doesn’t hurt your credit score since they use a soft inquiry.

How long does a preapproval auto loan last with Navy Federal?

Navy Federal’s preapproval auto loan typically lasts 60 days, giving you ample time to shop for a vehicle.

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