Also worth observing is that FICO doesn't have any magic ability to detect when an inquiry is auto-related vs. mortgage-related vs. neither. The only thing FICO has to go on is how that inquiry was reported to the CRA.
Therefore the following is quite possible:
* Bob goes shopping for a car. He goes to several dealerships in a ten-day period. He gives his social security number to each one. By Day 11 he has racked up 50 inquiries.
* Of those 50 inquiries, 44 are properly coded by the lender as auto-related. But 6 are not.
* From the perspective of FICO, therefore, Bob has 7 inquiries.
I have no way of guessing how likely that scenario is. Perhaps the likelihood is 1 out of 1000. Perhaps it is far higher. But it is certainly possible.
Moreover, there's no real way to find out whether all 50 are being detected as Auto. You can review your report, but even if the report doesn't list each one as of type Auto, it's possible that there is a database flag that was tripped in those six cases that we don't see that enables FICO to tell. Maybe!
Finally if you are able to ascertain that some of the inquiries are improperly coded, it will involve disputing each of them to get them changed.
Because of all that, some of us avoid excessive auto loan shopping. Insted we get our financing set up in advance with a credit union and then use that as leverage to get the auto dealer to knock a lot off the sticker price. You can still do your auto loan shopping at the end when you are almost ready to buy -- you are not locked in to using your CU. I have just chosen to set things up initially through a CU so that I can negotiate from strength and not give my SS # out to every dealer I go to.
Furthermore, I have not found it terribly difficult to call half a dozen lenders and ask them what are the best terms they offer to someone with a solid income, low debt, and a great FICO score. They might initially ask me for my SSN but I typically can get an interest rate quote when I explain that I am just scouting around and that I don't give out my SSN till I am ready to buy.
I also just really don't like 50 inquries being visible on the report.
The caveats I have given above are based my own personal preference -- in general rate shopping is considered a fairly safe thing to do. I just don't like to do more of it than I really need to, for all the reasons I list above.
