topic Re: Hard Inquiry Ruining Credit in General Credit Topics

Hard Inquiry Ruining Credit

Anonymous — Thu, 03 Oct 2019 16:19:53 GMT

Hi,

Two days ago, I went to a car lot just to look around and price the vehicles they have in stock.
I informed them of my FICO 8 score using data from Experian that is offered by Discover card at no cost
(which showed a 773). Also, I told them that Equifax has no credit data on any of my accounts and that
only Experian and TransUnion does. Also, that I had just recently paid off the vehicle I currently have
with 100% on-time and in-full payments, a perfect payment record over the 3 years and the payments were
$300 per month. They took down some information from me stating that it would save time if I decide I
want to go through them to make a purchase. They handed me a sheet of paper asking if the information
was correct and, if it was, to sign verifying the info was accurate. They used this to run a credit
check, unbeknowst to me, adding a hard inquiry to my credit. I did not realize that was what the paper
they asked me to sign was for as they did not state as such. I only found out when I got an alert on
my cell phone. When I asked about why, they said they don't need to inform me they were going to run
my credit.

Further, they said that the $6,995 vehicle I was interested in would require me to make a minimum of
$700 per month payments over 3 years, which would be $25,200! They said that they checked Equifax and
I have no record of any vehicle purchased and no credit history. I then promptly left this car lot,
that claimed 100% are approved, because of the, possible illegal, practices toward potential customers.

Today, I checked my Experian FICO score and that one single hard pull dropped my score from 773 all

the way down to 692, a drop of 81 points! Now, with this hard inquiry on my record, which will persist

for 2 years, I am hesitant to continue looking for a better vehicle, and one the family and I really need.

I feel a second hard inquiry may drop my score down to near the 500's as anothe rdrop of 81 would

put me at 611. Just ONE hard pull has totally ruined my credit and not sure what I can do. Is this normal

for one's credit to be completely ruined from one or two hard pulls? I don't understand this at all!

I hope someone can give me some piece of mind about what is happening. As it is now, it may take me

another 2 years to bring my credit score back up to where it was before this pull on my credit.

HillbillyBB

Re: Hard Inquiry Ruining Credit

Remedios — Thu, 03 Oct 2019 16:46:28 GMT

Hi and welcome to the forums @Anonymous

I do not believe it's possible for an inq to drop your score by 80 points.

I know you said you looked at your score using Discover score card, but have you actually looked at the report itself? That much of a drop is more indicative of negative info than anything else.

Re: Hard Inquiry Ruining Credit

Anonymous — Thu, 03 Oct 2019 16:57:05 GMT

There is nothing negative on my report that I can see. Payment history is 100%, zero derogatory marks, 7 year credit history and the only negative thing is the hard pull. That's why I don't understand how a single pull can drop the score from 773 to 692. With this much of a drop, I feel I will need to wait between 1 and 2 years to purchase another vehicle. I never realized how much of a major impact a hard pull is to the credit when I was led to believe a drop of about 5 points was the normal. I now know this is not the case but it has a signifivant impact on the credit score as well as one's credit worthiness, 3 years of perfect payments notwithstanding.

Re: Hard Inquiry Ruining Credit

kilroy8 — Thu, 03 Oct 2019 16:57:31 GMT

Many things here don't compute.

You mentioned that you have Discover. They absolutely report to Equifax.

80 point hit from even several inqs is not possible.

Interest at the rates you say the car lot quoted you is illegal in most states.

Re: Hard Inquiry Ruining Credit

DH1988 — Thu, 03 Oct 2019 17:20:01 GMT

The exact same thing happened to me when I was car shopping. I emailed the car salesman the next day asking why he ran my credit when I specifically asked that he not do a HP and his manager responded apologizing on his behalf and explaining it was a mistake. Okay, great but the inquiry was still on each of my reports. I made a similar post and a myFico commenter suggested I file a complaint with the Consumer Financial Protection Bureau. I did that last week -- it's in progress so I don't know if the inquiry will be removed but it's worth a try. You can also write letters to each of your credit bureau's explaining you did not authorize them to run your credit and request that they be removed.

Hope this helps, goodluck!

Re: Hard Inquiry Ruining Credit

calyx — Thu, 03 Oct 2019 17:37:18 GMT

As others say - this information isn't adding up.

No, the INQ did not drop your score 80pts on its own.

And as for the CFPB - if you signed something saying they were authorized/had permission to pull your credit, filing a report won't help. You mentioned the piece of paper - and what they told you - did you actually read it? You may have signed authorization for a pull without realizing it.

Re: Hard Inquiry Ruining Credit

StillKicking — Thu, 03 Oct 2019 18:26:35 GMT

Hmmm. Doesn't make sense. The last vehicle I bought dropped my score less than 10 points. But it went back up (and then some) after I made the first payment.

How recent did you pay off the car? Perhaps the installment loan being paid off had something to do with the drop in points.

You obviously now know this, but NEVER SIGN ANYTHING until you've negotiated EVERYTHING and are ready to purchase. EVER. And Then triple check all paperwork.

Did Experian give you an explantion why the drop in points?

Re: Hard Inquiry Ruining Credit

randomguy1 — Thu, 03 Oct 2019 19:43:23 GMT

What was the date of your Discover score vs the date in your latest score? Are they both from the same source?

Re: Hard Inquiry Ruining Credit

Anonymous — Sun, 06 Oct 2019 18:44:41 GMT

Look again at your reports and see if old positive, closed trade lines dropped off. Losing that history and the drop in your account aging factors would cause far more potential points lost than one inquiry, and even that is doubtful to fall 81 points. That bug a drop is a sign of negative info being introduced...

Re: Hard Inquiry Ruining Credit

Anonymous — Fri, 04 Oct 2019 09:51:07 GMT

Discover scorecard is not your credit report. It's just a summary and a score. You need to get your actual credit report to see what the issue is. Go to creditchecktotal.com and do the $1 trial. You will get all three reports.

Your score, even after the drop is fine for getting a car loan. Stay away from the "every is approved" places. Fact is the name brand lots have access to sub prime lenders too if your credit situation needs it and you will not have to pay 4 times the price of the car in interest.

Also lock/freeze your reports before car shopping. That will prevent unwanted pulls until you are ready to finance.

Re: Hard Inquiry Ruining Credit

JGGM — Sat, 05 Oct 2019 15:50:30 GMT

Sounds like you were at a "buy here pay here" lot, since you mentioned the 100% approved. I would imagine laws vary state by state, but where I am at, they can offer a "cash price" and then a "financed price". Because this type of predatory lending is very high risk, they market the price of the car up and then charge the highest legally allowed interest rate. They can mark the price of the car up because they are lending their money on it, so book value does not matter to them. In the end, if they repo the vehicle, they have not lost any money and they get to re-sell the vehicle in the same manner they sold to the consumer who defaulted.

Generally speaking - someone with your credit scores (even the now lower score) should not even consider buying a car from a place like this. You will get a much better vehicle, finance terms, etc. at a normal dealership (or a Carmax type place). If you're only trying to spending $7k on a car, maybe take out a personal loan and buy from an individual, if that's an option? I feel like in that price range that you're going to get an all-around better car and better deal buying from a private seller. The private seller offering a car for $7k was probably offered $5k to trade in at a dealer that would have re-sold for $9k. So it's really a win-win. Sure you might pay more in interest on a personal loan, but this is still a much better alternative than going to one of the lots you just visited.

I won't chime in on the inquiry reducing your score by 80+ points, others have already commented my thoughts on that.

Re: Hard Inquiry Ruining Credit

Brian_Earl_Spilner — Sat, 05 Oct 2019 16:06:12 GMT

Car shopping inquiries are grouped together. Now that you've taken the ding, you shouldn't receive any more for additional car shopping and financing inquiries in the next. 14-30 days, depending on the scoring and/or fico version.

Re: Hard Inquiry Ruining Credit

Anonymous — Sat, 05 Oct 2019 19:12:47 GMT

@Anonymous wrote:
... my FICO 8 score using data from Experian that is offered by Discover card at no cost ...

My Discover CC gives TU Fico 08 scores. Odd.

Re: Hard Inquiry Ruining Credit

randomguy1 — Sun, 06 Oct 2019 01:55:45 GMT

Discover gives TU

creditscorecard.com by Discover (free) gives EX.

Both FICO 8

Re: Hard Inquiry Ruining Credit

dynamicvb — Sun, 06 Oct 2019 17:52:55 GMT

I'm with everyone else, a baddie has to have been introduced. There is no way a single inquiry or even several could have dropped one that much even on a thin file.

Re: Hard Inquiry Ruining Credit

grower1 — Sun, 06 Oct 2019 18:20:13 GMT

My last hard pull dropped my score 3 points. As the others are saying, look for other causes of the score drop.

Re: Hard Inquiry Ruining Credit

Anonymous — Mon, 07 Oct 2019 14:45:57 GMT

Looking over my report, the only thing I can see that can be considered negative is the prior auto loan is now paid off, thereby no longer having no loan activity. Also, thanks for the advise of putting a temporary freeze on my credit. Hopefully, within a week, I'll get a vehicle and restore activity in credit reporting.

Re: Hard Inquiry Ruining Credit

coldfusion — Tue, 08 Oct 2019 02:13:51 GMT

@DH1988 wrote:
The exact same thing happened to me when I was car shopping. I emailed the car salesman the next day asking why he ran my credit when I specifically asked that he not do a HP and his manager responded apologizing on his behalf and explaining it was a mistake. Okay, great but the inquiry was still on each of my reports. I made a similar post and a myFico commenter suggested I file a complaint with the Consumer Financial Protection Bureau. I did that last week -- it's in progress so I don't know if the inquiry will be removed but it's worth a try. You can also write letters to each of your credit bureau's explaining you did not authorize them to run your credit and request that they be removed.

Hope this helps, goodluck!

If the creditor agrees that the hard pull was made by mistake or there was a fraudulent application they can submit a request to the CRA to withdraw it.

CRAs don't remove hard inquiries on the basis of a dispute except in very rare cases unless compelling evidence is presented that there was no permissable purpose for the inquiry.

Re: Hard Inquiry Ruining Credit

Anonymous — Fri, 06 Mar 2020 14:16:13 GMT

Know this is an old post, but I just recently found out, whenever you do a hard pull with anyone, a car dealer, a mortgage lender, that one time counts at 3 hard inquires, because they do a tri-merge credit pull. They contact Equifax, Experian and Transunion, contacting each credit bureau counts as 1 hard inquiry. We found out by talking to different lenders. My wife went on a spree in a panic to get into a house after we sold ours. Each lender's inquiry hit us 3 times. We hit the "Excessive" area of hard pulls which dings your credit even more. She talked to 6 lenders. 6 times 4 = 24 hard inquiries. We were pretty shocked. Most of that gets wiped if you get pre-approved and buy a house, but if you don't its stuck on your credit report for 2 years. Absolutely stupid. The credit system is super bias. Im guessing thats why your credit score took such a hit.

Re: Hard Inquiry Ruining Credit

seattletravels — Fri, 06 Mar 2020 15:07:10 GMT

@Anonymous wrote:
Know this is an old post, but I just recently found out, whenever you do a hard pull with anyone, a car dealer, a mortgage lender, that one time counts at 3 hard inquires, because they do a tri-merge credit pull. They contact Equifax, Experian and Transunion, contacting each credit bureau counts as 1 hard inquiry. We found out by talking to different lenders. My wife went on a spree in a panic to get into a house after we sold ours. Each lender's inquiry hit us 3 times. We hit the "Excessive" area of hard pulls which dings your credit even more. She talked to 6 lenders. 6 times 4 = 24 hard inquiries. We were pretty shocked. Most of that gets wiped if you get pre-approved and buy a house, but if you don't its stuck on your credit report for 2 years. Absolutely stupid. The credit system is super bias. Im guessing thats why your credit score took such a hit.

While this may be true, this isn't considered credit seeking behavior and while you might see multiple inq on your reports, they're only scored as 1.