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Registered: ‎05-19-2009
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Does being declined for an auto loan affect my FICO score?

Recently my wife and I bought a new car.  We both have good credit (800+) and did not have an issue getting preapproved for our loan of $20k.  About a week after we purchased the vehicle, we received two notices in the mail, one from Chase and one from US Bank, stating that we had been declined for our loans of $48k.  We contacted the dealership and it turns out that they applied for the loans on our behalf for the full amount of the vehicle. 

 

My question is this.  Does being declined for these two loans impact our FICO score?  If so, how can we correct that since we were not actually applying for the loans and the amount was also not correct? 

 

Thanks.

Moderator Emeritus
Posts: 32,869
Registered: ‎08-04-2007
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Re: Does being declined for an auto loan affect my FICO score?

All you would get dinged for is the inquiry, which is minimal for your score. The damage lasts for 12 months then FICO will stop scoring it after that. Also, if both inquiries were on the same CRA, then you only will get dinged for one of those. FICO will group all car and mortgage inquiries within a given CRA and count the group (car or mortgage) as one single inquiry if pulled within a 2 week period. Whether you were denied or approved, the damage is the same.

If you offered your name and information to the banks, and asked for or were offered preapproval, then you basically applied for a loan. They have to run your credit to see if you are preapproved.

Senior Contributor
Posts: 4,214
Registered: ‎09-12-2008
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Re: Does being declined for an auto loan affect my FICO score?

[ Edited ]

jdtracy1 wrote:

Recently my wife and I bought a new car.  We both have good credit (800+) and did not have an issue getting preapproved for our loan of $20k.  About a week after we purchased the vehicle, we received two notices in the mail, one from Chase and one from US Bank, stating that we had been declined for our loans of $48k.  We contacted the dealership and it turns out that they applied for the loans on our behalf for the full amount of the vehicle. 

 

My question is this.  Does being declined for these two loans impact our FICO score?  If so, how can we correct that since we were not actually applying for the loans and the amount was also not correct? 

 

Thanks.


 

I agree with llecs.

 

Your report will not indicate any decline of loan.  In fact auto loans are deduped (meaning multiple auto loan inquiries with 14 days of each other are treated as one for scoring).

 

And since you have a corresponding new account (loan) that correspond to the inquiries, it could just as well be that you took the best of three offers, as far as any outsider looking at the report would know.

 

And as mentioned above, inquiries are one of the least impactful (especially in case of deduped), and don't count after the initial 12 months, though they will still show on your report for 2 years.

Message Edited by txjohn on 05-19-2009 12:25 PM

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