 TITLE: Does Getting Preapproved for a Car Loan Hurt Your Credit? CONTENT: What Is the Difference Between Prequalification and Preapproval?\n----------------------------------------------------------------\nThe terms preapproval and prequalification are sometimes used interchangeably, but they may mean two different things depending on your lender and the type of loan. Both are ways that lenders initially assess how likely you are to get approved for a new loan and estimate your loan amount, interest rate and terms.\nPrequalification typically involves a soft credit inquiry, which does not affect your credit score, though some lenders may skip this altogether. You may also need to provide basic information like your annual income and monthly expenses. The prequalification offer you receive could change, sometimes significantly, once the lender takes a deeper dive into your credit during the application process.\nThe preapproval process for auto loans (and mortgages) is more involved than prequalification, resulting in a more accurate approved loan amount. The lender will conduct a hard credit inquiry to review your credit more thoroughly and may also require personal and financial details such as your employment status, monthly income, debt balances and more. They'll then tell you the amount you can borrow, with some lenders even providing an actual check you can use at the dealership to boost your bargaining power. END