06-05-2012 06:17 AM
Here's a bit of oddity. I have not gotten pre-approved for a loan because I just assumed (like what was discussed here) that an approval would expire in a month or two's time.
Well, I made a big step and stopped by the Subaru dealership. They said I would need to get approved for the loan before I could place an order for the car (which remember, won't be here until November). They said when the loan is approved, and I put down a $500 refundable deposit they will place the order for the car. Then when the car arrives, they will call up the loan company and "re-approve" the loan.
Well, my concern is the hard inquiry now, and again in November. This will be considered 2 seperate hits, because they aren't within a close period. Not only that, but I feel like there is a chance my score may go up from where it is right now.
Finally, I wanted to stop by my credit union to get approved before walking into the dealership so that I could avoid the (up-to) 2% hidden markup of whatever loan I am approved for. I feel like I am putting myself at a huge disadvantage because when the car is delivered they will have me over the coals.
How should I proceed?
06-05-2012 07:39 AM
Is this a car that is going to be in that high of a demand that you couldn't wait until November and then go to a CU followed by the dealer?
Follow my financial journey: http://www.frugalrican.com
06-05-2012 12:42 PM
Crashprime - I can fully understand the dealer wanting to make sure you can be approved for credit within their network before placing a special order for the car. And also a lot can change between now and November in your credit world so it is impossible for them to say that the approval is guaranteed until then.
That being said, it does not mean that you have to accept the dealer financing when the car is delivered. They should be able to give you at least a couple weeks notice before the special order arrives and you could secure your own financing at that time through whichever lender you choose. As to the inquiry, yes you will have one now and at least one then. But that is the small price you will have to pay for a special order versus buying what's on the lot. Good luck in your purchase.
06-05-2012 01:29 PM - edited 06-05-2012 01:32 PM
I know nobody can really predict the future with 100% accuracy, but what kind of credit score penalty will 1 auto loan hard inquiry typically have on an overall score, and how long does it take to gain those points back?
only ~4-years reporting on file
3-years of ontimes from an auto loan
only derogatory mark is a 30day late on a store card 1yr5mo ago.
06-06-2012 12:52 PM
The hard inquiry is typically only a few points and depending on how many are already on that bureau may not be any points at all. General consensus seems to be that a first inquiry with none in the last 12 months is 3-5 points. A second has no effect. Third may be a few additional and really none beyond that. The points lost are typically recovered in 4-6 months. The biggest factor is what else is going on in your credit between those months. New accounts or increased utilization or especially the appearance of a negative item or late pay would be the main concerns.
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.