Minimizing auto loan inquiries

[meeklo062704]

I've read all inquiries for auto loans in a 45 day period only count as one inquiry, but I've also read that it's for inquiries in a 15 day period. I plan on shopping around as I'm at that point where my fico is probably tier 3, but the auto enhanced is probably tier 2, so I want to give myself the best shot without racking up a bunch of inquiries because of a misunderstanding. What is the best way to shop around while keeping inquiries down as I only have 4 right now.

My first auto loan was a cross your fingers and hope you get approved loan because my credit was terrible. Are the online auto loan sites any good? Should I go through my bank? I'm not a credit union member, so are they out as an option? Any pointers would help out as this is uncharted territory for me.

[Anonymous]

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@meeklo062704 wrote:

I've read all inquiries for auto loans in a 45 day period only count as one inquiry, but I've also read that it's for inquiries in a 15 day period. I plan on shopping around as I'm at that point where my fico is probably tier 3, but the auto enhanced is probably tier 2, so I want to give myself the best shot without racking up a bunch of inquiries because of a misunderstanding. What is the best way to shop around while keeping inquiries down as I only have 4 right now.

My first auto loan was a cross your fingers and hope you get approved loan because my credit was terrible. Are the online auto loan sites any good? Should I go through my bank? I'm not a credit union member, so are they out as an option? Any pointers would help out as this is uncharted territory for me.

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I'll let others suggest where to shop around but just so you understand clearly, the number of inquiries that are related to auto financing in a 2 week period count as 1 only for purposes of FICO 08 scoring.  They still will show as individual inquiries on your credit report and can hurt you regardless of your FICO score.  So you're doing the right thing in trying to minimize the number you get.  A credit union isn't out as option because you can easily join many of them online.  DCU is one that many people here have used. I would avoid any online preapproval sites because the dealer will still pull your credit once you get there.

[Revelate]

2 weeks for FICO '98 scoring.

FICO 8 is actually 45 days, but since EX Risk Model v2 is one of the trifecta, and that's a 98 score, you're right; two weeks is where it should be for all recommendations.

[Anonymous]

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@Revelate wrote:

2 weeks for FICO '98 scoring.

FICO 8 is actually 45 days, but since EX Risk Model v2 is one of the trifecta, and that's a 98 score, you're right; two weeks is where it should be for all recommendations.

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Thanks for the clarification

[meeklo062704]

Considering how far I was in the hole with credit, it's been a tough climb. I've been really good about not wasting inquiries, so I'm actually at 100% with inquiry to approval over the last year and a half. Am I better off seeing if the dealer will approve me, then start shopping if they don't? Or am I better off having something lined up for leverage when I go in?

My score is somewhere between 630-650. The auto enhanced should raise it because my wife and I paid off a 36 month loan in August with flawless payment history. We both have 2 credit cards that are all 3-7 months old, added each as authorized users. They've been paid perfectly and utilization will be below 30% after the next payment. We work at the same place with over 3 years on the job, and it comes with a free apartment so dti is low. I have a couple small medical collections that are a few hundred from paid off, and a tax lien that we are in a payment arrangement on.

My.only concern is if we'll get denied for the amount of the loan. Our first loan was around $10,000, but the new one will be around $25,000. So I'm not sure how'll it'll go. My hope is they'll see the short loan showed stability on a higher payment so they'll let it go through. I want to get a longer term for the lower payment, then refi when or scores get into the 700s.

Any pointers on how to go about the loan shopping process, or increasing approval chances would be greatly appreciated. We're almost out of the hole into a credit comfort zone, and another car loan would help out.

[StartingOver10]

If your goal is to get a good rate with minimal inquiries, then use a CU for financing. They pull once or at  most twice if you include the pull for membership and you end up with a really good rate and good terms. Before you apply, make sure you speak to someone about your file being thin (only a few months for your cc's).  If they need more history, then find another CU.

If you have a dealer pull your credit you will end up with a bunch of inquiries.  Even if you tell the dealership to limit their inquiries, it seems they ignore the limitation or maybe don't have the capacity to only pull one.  From my experience and others here you end up with a minimum of 5+ inquiries and some of these dealerships have much more than 5. 

Everytime I have used a CU it was only one inquiry for the tradeline and a much better loan.

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[TRC_WA]

My plan was to  use my home CU BECU for my auto financing... and they approved me for $25k.  I attempted to recon and they wouldn't budge over $28k despite the fact I have perfect credit with them with my CC and nearly a year of payments with them ($373 payment due, $500 actual payment) since I refinanced with them in March 2014.

So I apped with Chrysler Capital and got a $47k preapproval.

When I found the car I wanted the dealership said they can get me a better rate... so I let them do it and they did... 4.99% with Columbia Credit Union here in WA.  I took about 15 INQs over the last week and lost 1 point on EQ with the first... NONE after that according to myFICO.

I'll probably refinance in a year with BECU but I'm happy with the rate I got all things considered.

One thing I do want to mention is even if you go in there with a preapproval from your CU... the dealership will still pull your credit.  They told me it's the law as part of the identity verification homeland security stuff after 9/11.  I got the same story from both dealerships.

At any rate, I got my Challenger and I'm in the garden.  The auto loan process wasn't all that difficult despite the numerous inquiries.  My score wasn't affected.

[StartingOver10]

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@TRC_WA wrote:

My plan was to  use my home CU BECU for my auto financing... and they approved me for $25k.  I attempted to recon and they wouldn't budge over $28k despite the fact I have perfect credit with them with my CC and nearly a year of payments with them ($373 payment due, $500 actual payment) since I refinanced with them in March 2014.

So I apped with Chrysler Capital and got a $47k preapproval.

When I found the car I wanted the dealership said they can get me a better rate... so I let them do it and they did... 4.99% with Columbia Credit Union here in WA.  I took about 15 INQs over the last week and lost 1 point on EQ with the first... NONE after that according to myFICO.

I'll probably refinance in a year with BECU but I'm happy with the rate I got all things considered.

One thing I do want to mention is even if you go in there with a preapproval from your CU... the dealership will still pull your credit.  They told me it's the law as part of the identity verification homeland security stuff after 9/11.  I got the same story from both dealerships.

At any rate, I got my Challenger and I'm in the garden.  The auto loan process wasn't all that difficult despite the numerous inquiries.  My score wasn't affected.

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^^^^^^We have had that discussion on here several times - but the dealership will tell you they have to pull your credit for the above stated reason, but there is another form they can have you fill out and sign that is NOT an authorization to pull credit and it fulfills the homeland security obligation. I forget the form, but will look for it. The whole reason they pull your credit is to get the loan - period. They make more on the back end in the F&I department than they do on the vehicle so if they can give you an excuse to pull your credit they will do it. Even if you want to pay cash. I completely understand the OFAC issue - but putting on 5+ inquiries to check against the OFAC list - no way.

Here is one of the threads discussing this issue http://ficoforums.myfico.com/t5/Auto-Loans/WTH-Patriot-act-OFAC-requires-me-to-fill-out-a-credit/m-p...

[Anonymous]

I worked at a dealership after 9/11 and we sold many cars to people with preapproved loans and never ran their credit.  It's a BS excuse that I've never heard of until reading it here.  Additionally I just purchased a car in July, walked in the dealership and told them I had my financing lined up with USAA and  drove off with the car without giving them anything from USAA.  They never ran my credit.

StartingOver is dead on, it's just an excuse for them to run your credit and try to secure the financing.  Tell them to pound sand or you're going elsewhere.

[Anonymous]

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@StartingOver10 wrote:

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 They make more on the back end in the F&I department than they do on the vehicle so if they can give you an excuse to pull your credit they will do it. Even if you want to pay cash. I completely understand the OFAC issue - but putting on 5+ inquiries to check against the OFAC list - no way.

Here is one of the threads discussing this issue http://ficoforums.myfico.com/t5/Auto-Loans/WTH-Patriot-act-OFAC-requires-me-to-fill-out-a-credit/m-p...

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Well let's not go too far overboard 😀. Yes, sometimes dealerships make more in F&I then on the car itself but that's certainly not the case most of the time.  With the advent of manufacturers special financing like 0% it's very hard to do that any longer.  A lot of times if the customer takes advantage of the special financing dealers will make only the $50 or $100 that the manufacturers finance company gives them for processing the loan.