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Is my Credit record ruined by Auto dealer?

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Anonymous
Not applicable

Is my Credit record ruined by Auto dealer?

My credit score is about 730 and  recently I went to Toyota dealer for an Auto loan. Financing officer told I am eligible for zero interest loan and went ahead with other paper works. After signed I realized that I have been ripped off and eventually I returned the car to dealer and cancelled the agreement.  Then I went to another Toyota dealer and got my Auto loan without any hassle.That is a different story. 

 

My question is, now  I receive mails from various banks (about 3-4) saying that I applied for auto loan from them through Toyota dealer and it is not approved.

 

How ever I applied financing from the dealer only. Can this dealer apply Auto loans for me from various banks with out my knowledge. 

 

Most importantly how this credit  disapproval decisions effect to my credit report. If it is negetively what option I do have to recover it. 

 

Thanks a lot for your advices.

 

 

Message 1 of 8
7 REPLIES 7
pizzadude
Credit Mentor

Re: Is my Credit record ruined by Auto dealer?


@Anonymous wrote:

My credit score is about 730 and  recently I went to Toyota dealer for an Auto loan. Financing officer told I am eligible for zero interest loan and went ahead with other paper works. After signed I realized that I have been ripped off and eventually I returned the car to dealer and cancelled the agreement.  Then I went to another Toyota dealer and got my Auto loan without any hassle.That is a different story. 

 

My question is, now  I receive mails from various banks (about 3-4) saying that I applied for auto loan from them through Toyota dealer and it is not approved.

 

How ever I applied financing from the dealer only. Can this dealer apply Auto loans for me from various banks with out my knowledge. 

 

Most importantly how this credit  disapproval decisions effect to my credit report. If it is negetively what option I do have to recover it. 

 

Thanks a lot for your advices.

 

 


There is never any effect to your credit reports when you are declined financing.  You'll see an inquiry for the finance application process, but that is not indicative of either approval or denial.   No one will know except you.

 

Auto dealers routinely shotgun credit apps out to a number of different lenders to increase approval odds, so you'll see additional inquiries from these lenders, and you may see denial letters as you described.  FICO will score auto finance inquiries with a few weeks of each other as a single inquiry, so there should be minimal scoring damage.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 2 of 8
DrJim
Frequent Contributor

Re: Is my Credit record ruined by Auto dealer?

What the other poster said.

 

And remember, inquiries only count for 10% of your score, a vry small percentage.  Auto inquiries (like mortgages) are counted as one inquiry becasue the expectation is that you (or you through the dealer) will shop around.  They only affect you for a year, and at a declining affect, and fall off after two years.

 

Now, what us smart shoppers know is to get approved BEFORE you go to the dealership from several different sources and then make them beat your best offer.  Remember, this is one of their biggest profit sources, the other is extended warrantees.



Starting Score: TU 672 EQ 654 10/20/09
Current Score: TU 775 EQ 783 EX 799 (PLUS)
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Message 3 of 8
Anonymous
Not applicable

Re: Is my Credit record ruined by Auto dealer?

Thanks a lot and I feel better now. I'm curious how this become dealers biggest profit source.
Message 4 of 8
DrJim
Frequent Contributor

Re: Is my Credit record ruined by Auto dealer?

Just put yourself in the banker's shoes.  You have dealers all over the country funneling customers to you every day.  You make gobs of money from the loans and you can pick and choose who you will lend to and at what rate.  Most folks go into a dealership without funding and are only looking at the monthly payment.  Not total cost.  Not finance charges.  Not length of loan.  Just, "how much do I need to pay out each month because I'll have a car payment my entire life".  They bring customers to your door without you doing a freaking thing!  You would pay handsomly for that.  And you know what?  You pay more the higher the interest rate!  So it is in the lenders and dealerships best interest to give you the highest interest rate possible!

 

Dealerships can sell every car on their lot for cost and still make money.  They get dealer incentives, financing, service, fees, and if you are a happy customer you come back in a few years, trade your car which they sell for more than they paid for it and get you in the cycle all over again.  The crazy thing?  Half the people who walk into a dealership pay full sticker price!  And you tell all your friends how nice they were and what a great deal you got so they make even more money that way.

 

Never forget.  This is business.  This is to make money.  Most salespeople are hired for a few months when they are between jobs.  They sell to their family and friends, make the dealership a lot of money, and move on.

 

Not to mention that you are buying a rapidly depreciating asset that is usually the second largest purchase you make behind your house which will hopefully appreciate.

 

This is why I buy late-model low mileage used cars, research, negotiate, and go in with several approvals from banks and CU's.

 

Rant over Smiley Happy



Starting Score: TU 672 EQ 654 10/20/09
Current Score: TU 775 EQ 783 EX 799 (PLUS)
AMEX Delta Platinum $35K, NFCU Visa Signature $30K, HHonors Reserve Visa $35K, WF $13.5K, IHG Rewards Club MC $25K
Message 5 of 8
QCTRAV
Valued Member

Re: Is my Credit record ruined by Auto dealer?

This is so funny because I have a story close in relation to this. Went to the dealsership, and they wanted to pull my credit in house to see what the numbers look like. They told me for the truck I wanted, (48K) Is not going to work and im on to much truck. 5 Days later i realized they sent me out to 19 different banks.. I now have 19 INQ's from that day, and yes my credit is ruined. 

Starting Fico Score 589 Current 640

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In the Garden 5/14 until 5/15
Message 6 of 8
pizzadude
Credit Mentor

Re: Is my Credit record ruined by Auto dealer?


@QCTRAV wrote:

This is so funny because I have a story close in relation to this. Went to the dealsership, and they wanted to pull my credit in house to see what the numbers look like. They told me for the truck I wanted, (48K) Is not going to work and im on to much truck. 5 Days later i realized they sent me out to 19 different banks.. I now have 19 INQ's from that day, and yes my credit is ruined. 


Your FICO score shouldn't be hit by this ~ auto finance inquiries in a short time frame will be scored as a single inquiry by FICO.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 7 of 8
Anonymous
Not applicable

Re: Is my Credit record ruined by Auto dealer?


@QCTRAV wrote:

This is so funny because I have a story close in relation to this. Went to the dealsership, and they wanted to pull my credit in house to see what the numbers look like. They told me for the truck I wanted, (48K) Is not going to work and im on to much truck. 5 Days later i realized they sent me out to 19 different banks.. I now have 19 INQ's from that day, and yes my credit is ruined. 


Your score isn't ruined nor is your credit. Inquires are only 10% of your score and auto inquires count as 1 if done within a period of time.

 

Message 8 of 8
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