Hard Inquiries-Impact and how to remove them?

[dyneemo]

Hello

I started monitoring my credit about a year ago when I started a credit consolidation program. I noted some 'hard inquiries' on my file that were not authorized by me in any way, shape or form. A major car dealership ran my credit when I had to return a car to them per the Washington State Lemon Law (which meant they had to reimburse me for all payments, down payment, etc that I had into the car because the car had major non-fixable malfunctions).The sales manager at the dealership wanted to get me into a different car (because the Lemon Law is bad for a dealership) and even though he knew I was dropping off my car and picking up a reimbursement check, he ran my credit to try and get me to just get a different car from their dealership. I never authorized this; I told him I was only dropping my car off and getting the check from VW Corporate, not buying a car

I now have 7 (seven) hard inquiries from the dealership attempting to 'finance' a car for me. I have contacted all three major credit bureaus to get these removed as they were NOT authorized by me. The bureaus tell me that they were 'factual' inquiries and therefor I have to contact the bank(s) to see if they will remove the file. I have contacted the dealership directly and they tell me there is nothing they can do for me and that they ran the credit because they thought I was doing a 'collateral' swap...but a collateral swap does not entail running credit...it is essentially replacing the faulty car for a new, functional vehicle.

For the Lemon Law, a dealer has two choices: purchase the car back from the customer or replace the car with a car of equal value. Nowhere does it call for running credit again

Can you tell me how impactful these inquiries are on my score? None of them were approved, unfortunately, due to credit issues I was having at the time due to my husband's financial hardship (prior to that, the car loan for the brand new car I had to return had a finance rate of only 1%). Is it even worth fighting to have them removed or will they really impact my score and bring it up?

Any information or advice is so greatly appreciated

Dy

[dodfire]

How old are the inquires?

Inquiries only stay on your CR 2 years.

If they are all auto related in a short period of time the CRA only counts them as 1 inquiry as far as scoring goes.

[bettercreditguy1]

Inquiries follow your report for 2 years, yet they only factor into Fico Scoring for one year. Additionally, if they were all coded "as automobile", Fico only counts them as one ding although each pull will show up. After one year, they do not have much impact other than the visuals being there for the two year period.

[RobertEG]

Following is an extract from  a February 11, 1998 advisory opinion by the FTC, which details their view on permissible purpose with respect to auto dealer inquiries:

“Section 604(a)(3)(F) permits CRAs to provide consumer reports to any party who has a "legitimate business need for the information in connection with a business transaction that is initiated by the consumer." You ask whether this provision allows a dealer to obtain a consumer report on a person who "comes to an automobile dealership and requests information" from a salesman about one or more automobiles. In our view it does not, because a request for general information about products and prices offered does not involve a business transaction initiated by the consumer.

"More generally, you ask "when is the beginning of a business transaction" initiated by the consumer? In responding to this question, it is important to note that Section 604(a)(3)(F) limits this "business need" permissible purpose to transactions (i) that are "initiated" by the consumer and (ii) where the seller has a "legitimate business need" for the information. The staff's view is that an automobile dealer may obtain a report only in those circumstances in which the consumer clearly understands that he or she is initiating the purchase or lease of a vehicle and the seller has a legitimate business need for the consumer report information in order to complete the transaction.

For example, a consumer who asks a dealer questions about prices and financing is not necessarily indicating an intent to purchase or lease a vehicle from that particular dealer. Nor does the dealer have a "legitimate" business need for a consumer report in this situation. The consumer may simply be comparison shopping. In such a situation, the dealer must obtain written permission from the consumer before obtaining a consumer report. If the dealer would like to see a consumer's credit report before answering general questions about the availability of financing, this must be explained to the consumer and written permission must be obtained. In the same way, a request to "test drive" a vehicle does not indicate an intent to initiate the purchase or lease of the vehicle. Accordingly, if a consumer asks to test drive a vehicle, the dealer must obtain written permission from the consumer before obtaining a report.

"Only in those circumstances where it is clear both to the consumer and to the dealer that the consumer is actually initiating the purchase or lease of a specific vehicle and, in addition, the dealer has a legitimate business need for consumer report information may the dealer obtain a report without written permission. In this regard, we note that obtaining information for negotiation purposes does not constitute a "legitimate" business need. The dealer must have a specific need for the information directly related to the completion of the transaction. For example, a dealer may obtain a report, if one is necessary, in order to arrange financing requested by the consumer.(1) The dealer may also obtain a report to check a consumer's creditworthiness when the consumer presents a personal check to pay for the vehicle. By contrast, a permissible purpose would not arise if a consumer intends to pay by cash”

[ABuckNow]

Have the dealer notify the bureaus that they pulled your credit in error and did not have a permissible purpose.

I had a similar situation, the short version: EX complied, TU did eventually, EQ didn't.

There is nothing you can do, the CRA (EQ in particular) blatantly violate the FCRA - they know it and don't give a damn.

It has to come from the dealer: a letter from them is good (get a copy), or have them do it electronically is best. Or both!

Good luck!

Do keep us posted please, I'd like to know how it turns out.

[RobertEG]

While you may not wish to invest the time and effort, there is always something you can do.

You can always bring your own civil action against the dealer for an impermissible pull not authorized under section 604.

If the transaction did not involve a legitimate business need to review your credit, which can certainly be argued if there is no money due on the part of the consumer, they do not have a permissible purpose to review the consumer's credit. 

I highly doubt that the dealer is going to voluntarily notify the CRA that their prior inquiry was impermissble.

However, by the time that wends its way thru the court, at least the FICO impact will already be gone. 

Collecting any monetary damages will most likely require showing that they were aware of the impermissibility of the inquiry, and yet nonetheless proceeded.