Kudos has partnered with CardRatings and Red Ventures for our coverage of credit card products. Kudos, CardRatings, and Red Ventures may receive a commission from card issuers. Kudos may receive commission from card issuers. Some of the card offers that appear on Kudos are from advertisers and may impact how and where card products appear on the site. Kudos tries to include as many card companies and offers as we are aware of, including offers from issuers that don't pay us, but we may not cover all card companies or all available card offers. You don't have to use our links, but we're grateful when you do!
Does Carvana Affect Your Credit Score?
July 1, 2025
Quick Answers
Checking your financing options through Carvana's pre-qualification process involves a soft credit inquiry, which will not affect your credit score.
A hard credit inquiry, which may temporarily lower your score, is only performed when you officially submit a loan application.
Securing a loan and making consistent, on-time payments can positively impact your credit history over the long term.
What Is Carvana?
Carvana is an online-only used car retailer that has reshaped the automotive sales industry by moving the entire purchasing process online. From browsing inventory to securing financing and arranging for vehicle delivery or pickup, customers can complete every step from their computer or smartphone. The company is also known for its distinctive, multi-story car vending machines located in various cities, offering a unique vehicle retrieval experience.
Like any vehicle financing, the process at Carvana intersects with your credit history. The platform allows prospective buyers to get pre-qualified for a loan using a soft credit inquiry, which does not affect their credit score. However, completing the purchase with a Carvana loan will trigger a hard credit inquiry, which is standard practice and can cause a temporary, minor dip in your credit score.
How Carvana May Impact Your Credit Score
While Carvana’s prequalification process won't hurt your credit, moving forward with financing will. Understanding how and when your score might be affected can help you navigate the car-buying journey.
- Prequalification and Soft Inquiry: Initially, Carvana allows you to prequalify for financing. This step typically involves a soft inquiry, which does not impact your credit score and lets you see estimated loan terms.
- Formal Application and Hard Inquiry: Once you decide to proceed with a purchase, you will formally apply for the loan. This action triggers a hard inquiry on your credit report, which can cause a minor, temporary drop in your score.
- Rate Shopping Window: Fortunately, credit scoring models usually bundle multiple auto loan inquiries made within a short window (typically 14-45 days) into a single event. This allows you to shop for the best rates without taking multiple hits to your score.
- Opening a New Account: Finalizing the loan adds a new installment account to your credit report. This can initially lower your score by reducing the average age of your accounts, but it also improves your credit mix, which is a positive factor.
- Ongoing Payment History: The most significant long-term impact comes from how you manage the loan. Consistent, on-time payments will build a positive payment history and can improve your credit score over time.
How Much Will Carvana Affect Your Credit Score?
The impact on your credit score depends on several factors, including your current credit history. Here are a few key points to consider when financing through Carvana.
- Hard vs. Soft Inquiries: Carvana's pre-qualification is a soft inquiry that won't affect your score. However, finalizing the loan triggers a hard inquiry, which can cause a small, temporary dip.
- New Credit Account: Opening a new auto loan adds a new account to your credit report. This lowers the average age of your accounts, which may temporarily decrease your score.
- Payment History: Consistently making on-time payments is crucial for building a positive credit history. This responsible behavior will help improve your score over the life of the loan.
How You Can Avoid Carvana Affecting Your Credit Score
Utilize Pre-Qualification
Carvana’s pre-qualification tool lets you see potential loan terms using a soft inquiry, which won't impact your credit score. This gives you a clear financial picture and estimated monthly payments without the commitment or negative effect of a formal hard credit check.
Limit Hard Inquiries
Credit scoring models often treat multiple auto loan inquiries within a short period (typically 14-45 days) as a single event. By confining your rate shopping to this window, you can compare offers from Carvana and others with only one potential hit to your score.
Ways to Improve Your Credit Score
Improving your credit score is an achievable goal that can significantly boost your financial health. With consistent, positive financial behaviors, most people can see meaningful changes within a few months, according to one expert guide.
Monitor your credit reports regularly. Obtain your free reports to check for and dispute any inaccuracies, which can unfairly lower your score.
Establish automatic bill payments. Your payment history is the most significant factor in your score, so ensuring timely payments is essential for improvement.
Reduce your credit utilization ratio. Aim to use less than 30% of your available credit, as high balances can signal financial risk to lenders.
Become an authorized user. Being added to an account with a long history of on-time payments and low utilization can give your score a boost.
Diversify your credit mix. Lenders like to see that you can responsibly manage different types of credit, such as credit cards and installment loans.
Limit hard inquiries. Avoid applying for too many new credit accounts in a short period, as each application can temporarily dip your score.
The Bottom Line
Financing a vehicle through Carvana involves a hard credit inquiry, which can temporarily affect your credit score. This impact is similar to applying for any other auto loan.
Frequently Asked Questions
Does Carvana's pre-qualification affect my credit score?
No, Carvana only performs a soft credit inquiry for pre-qualification. This allows you to see your financing terms without impacting your credit score at all.
Will my credit score drop after financing a car with Carvana?
You might see a small, temporary dip after the hard inquiry for the loan. However, making consistent, on-time payments will help build your credit over time.
Does Carvana report to all three credit bureaus?
Yes, Carvana reports your auto loan and payment history to all three major credit bureaus—Equifax, Experian, and TransUnion—which can positively impact your credit history.
Supercharge Your Credit Cards
Experience smarter spending with Kudos and unlock more from your credit cards. Earn $20.00 when you sign up for Kudos with "GET20" and make an eligible Kudos Boost purchase.
Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
