Question about Credit Rating?

Can someone please tell me why if you are looking to buy a car and several different places run your credit to get your loan approved with their banks, your credit rating goes down? I don't understand why it would go down. What is the reason behind lowering your credit rating for shopping around for the best deal? Just trying to understand how this all works.

Public Comments

1. When ever you are applying for a loan the loaner will check your credit rating to make sure it is safe to loan you the money. Every time someone takes a look at your credit rating it goes down a little bit, and if you are accepted for the loan your rating will go down until you make a few payments on the loan then your score will go higher.
2. Auto finance is what I do for a living and the system is set up so all inquiries made in a 14-day period are lumped together and only count as one. They all show but your credit only gets dinged once.
3. Your credit rating goes down when you seek to have credit, be it a credit card, a car, or a house. If you are only interested in getting a price without having financing with the dealership, don't give them your driver's liscense. Just say, that you want to get an idea as to how much they are charging. If they refuse either ask to talk to the manager, say you're using your credit union, you are using cash, or they just lost a customer and will relate this to all your friends and have them shop at other dealerships.
4. To find out specifically about credit rating, you can order your score report from all three national credit bureaus. In addition to your score<!--you'll get your credit report, an indication of how your score ranks nationally and an explanation of how you can boost your standing. http://badcredits.awardspace.com/creditscore.htm In order to improve your credit score, it's important to know where you stand currently. Despite all the media attention given to free credit reports-->you still have to pay to find out your credit score, the three-digit number ranging from 300 to 850 that is the key to your borrowing costs.
5. Part of how your FICO (credit) score is calculated is based on the number of credit unquiries there have been recently made about you. FICO scores are calculated based on a 100 point system, divided into 5 areas of major interest to lenders: 1. Paying your debt obligations on time = 35% 2. Your credit to debt ratio = 30% 3. Frequency of applications for new credit = 15% 4. What types of debt you are carrying, for example installment, bank credit, credit cards = 10% 5. How old your accounts are = 10%. This means the two most important things you can do for free legal credit repair are (1) pay on time, and (2) keep your debt below 30-50% of the total credit available to you. Don't apply for new credit unless you absolutely have to - at least not if you are needing to do free legal credit repair, or unless you need a greater variety of credit types. The link will explain more about keeping your score healthy, the FREE and LEGAL way.
6. Spif Thats is what I thought and believed until I offered to co-sign a car for my daughter, they ran it through 4 banks at the same time, my score showed 4 inquiries. She did get the car but I took a hit