12-10-2013 08:42 PM
I just bought a car three weeks ago. The dealership told me my loan was approved with Honda and I was allowed to drive the car and bring it home. Today, I get a letter basically saying my loan was denied. On the letter, it says my credit score is 827. The reasons for denial are
Amount owned on revolving account is too high (the maximum I own on my credit cards in total is 3k -it is 3% of my total credit limit ).
Time since most recent account opening is too short (the last account I have opened is in 2009)
Lack of recent installment loan information (I had paid off my old car in 2010).
I checked all my credit scores and they are between 775 to 827.I earn 70k a year. My credit history is 10 years long.
In addition, they all show a loan account was opened with Honda of the same amount of the loan as I was approved when I bought the new car. I haven't received paperwork from Honda yet.
Why would my loan be denied or is that letter in error? What about the account with Honda that is opened on my name? Is that a fraudulent account?
I will be talking to both Honda and the dealership tomorrow to clarify.
12-10-2013 09:14 PM - edited 12-10-2013 09:15 PM
I wonder if the dealership is trying to do a spot delivery type scam on you?
Who did the letter come from, the dealership or the lender? Seems like it would be very unusual for a new Honda finance tradeline to open up on your CR contemporaneously with your purchase of the car and now they say 'no loan'. Doesn't pass the smell test.
With your scores, your income and your low debt level - I find it difficult to believe you weren't accepted by the lender.
In any event, check directly with the lender first to see the status of your actual loan. That way if the dealership sent the letter and the lender has already funded you can tell the dealer to go pound sand.
12-10-2013 11:48 PM - edited 12-10-2013 11:52 PM
How long have you had the car? If the tradeline is open, then you should be fine and disregard the letter. I would call Honda Finance tho to clarify some things especially if the loan has been open for a few weeks and they are sending a denial letter now. I don't believe the dealership will be of any assistance at this point. Financing can fall through after the fact. A dealership lets you leave with the car before finance comes back with final approval. There will be an unfortunate case that the financing falls through and the dealer tries to get you approved through several other banks. If all fails, they will contact you to ask you to return the vehicle and sign transfer paperwork back to them. This isn't uncommon. But I wouldn't worry about that as your credit seems solid
12-11-2013 02:28 AM - edited 12-11-2013 02:33 AM
Interesting. Every car purchase I have ever made required the financing approval in place and my proof of insurance before the dealer would allow the vehicle to leave their possession. Purchase a new car very two to four years and find this very interesting as at no time did any dealer (even ones I knew well) ever trust me with a vehicle until all financing and insurance were locked into place. Leaves daredeveil19790 potentially in a bad place when in good faith he hits the road. Somebody needs to be choked!
12-11-2013 06:33 AM - edited 12-11-2013 06:36 AM
I bought the car on 11/9 and I got the letter yesterday (The letter from the dealership was dated 11/29). I also paid 4.5k down on the car. The account for the Honda auto loan was opened in November per my credit reports. It gives the exact amount of the loan as well as the exact amount of the loan payments per month. I had also negotiated for the title and registration and got that check along with the letter. I am not going to cash it until I know what is going on. I had also provided them the insurance on the car on 12/9 itself and had Geico fax them the papers. Honda financial opens in an hour and I will be calling them to find out if the loan was approved or not.
I have not got any letter from Honda. The letter was from the dealership.
12-11-2013 07:54 AM
I just got off the phone with Honda. My loan has been approved. They provided the account number. I logged in and everything looks fine but the payoff amount. It seems to be off by $27. It's not a huge difference. But the loan was approved on November 12. Honda said they sent me a welcome letter but I did not get one. The weather here haas bern pretty bad. It might have got lost. However,. I am now completely amiss to why I got the letter from the dealership then. Should I talk to the dealership ?
12-11-2013 07:55 AM
Since it is from the dealership and included paperwork, my guess is the title clerk hit the button for letter 11 not letter 12. Meaning an automation mistake. Talk to Honda, confirm everything then take a copy of the letter to the dealership. Ask to see the general manager or preferably the owner of the dealership. Don't say anything when you hand him the letter and your car keys. DO NOT SPEAK UNTIL AFTER HE SPEAKS. DO NOT SAY ANYTHING, LET HIM SWEAT. If he doesn't immediately roll over and start offering free car washes, oil changes, etc. I will be shocked.
However, if he doesn't immediately apologize, calmly let him know you have talked with Honda financing and will be asking them to investigate his dealership. You will also forward copies of all documents and correspondence to the BBB and the state AG and advising them of the spot delivery scam he's running.
At this point he should be down on his knees lickiing your shoes. Again if he isn't, I would never darken the doors of that dealership again as they will rip you off bllind on every service bill, waranty claim etc.
12-11-2013 08:26 AM
The payoff being $27 higher is probably interest
12-11-2013 06:12 PM
The letter from the dealership regarding the denial and the the check for the title and registration came in two different mails. They both arrived on the same day. I believe what coterotie stated might be true and someone at the dealership just sent me the wrong letter. I downloaded the welcome letter from Honda finance from their website and I am waiting for the payment information package that I was told was mailed on the second of this month. I am going to wait it out until this weekend for that and then go to the dealership and talk to the manager as coterptie suggested.
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO