On July 1 evening, I agreed to purchase a new car from a dealership and filled out their handwritten credit application with my income as $8,000 monthly. Salesperson gives the handwritten credit application to the finance manager while I wait at the front of the dealership. Without allowing me to verify the information and sign the consent to forward my credit application and obtain my credit reports, finance manager submits the typed credit application, but the banks were closed for the day to figure out if the loans got approved or denied.
On July 2 morning, finance manager tells me one loan got approved and two loans got denied due to "High debt-to-income ratio" for a new car that I already paid about 80% with the down payment and two trade ins and needed 20% financed. I sign the paperwork dated July 2 for the loan that got approved including the credit application consent. I receive a copy of the paperwork and took delivery of the new car.
On July 4, I noticed on the copy of the typed credit application timestamped July 1 the income was $8,000 yearly and it did not match what I wrote. I called my salesperson for a copy of the handwritten credit application to find out if I wrote my income incorrectly, but he tells me the accounting office was not available that day.
On July 5, finance manager was certain that the income was submitted as $8,000 monthly and provided a screenshot of the "Applicant Information" with $8,000 monthly income shown which seems like it allowed changes before sending it to me. I decide to call the bank that approved the loan to see what they receive on the credit application as my income and ended up speaking with the underwriter that approved and finalized the deal. Underwriter claims it was submitted as $800 monthly income, but knew the loan would not get approved so underwriter assumed it was an error and added an extra zero to the end without contacting the dealership to verify which is fraud. This meant the other two banks did in fact received the incorrect income, but did not attempt to fix it and just straight up denied the loan. At this point, I tell my salesperson that I have decided to pay off the loan.
On July 6, I tell the finance manager that I wanted to meet in person to get clarification as to how everything could have happened, but their response was they did not understand what the issue is. I went to the dealership and met with the finance manager. From this conversation, I found out that initially the income was in fact sent incorrect, but since the banks were closed for the day they couldn't fix the error. Finance manager claims they fixed the error, but did not get a callback until July 5 from the two banks that declined. Finance manager tells me the loan approval was changed from negative denied to positive approved in my credit report. From my research, denied loans shouldn't affect my credit score anyways. Finance manager proceeds to provide me a copy of the corrected typed credit application timestamped July 6 a couple minutes before we spoke. They also let me know that underwriters are not allowed to talk to clients/borrowers, but from my research it is at the discretion of the bank whether they allow it or not.
On July 7, I noticed at least one extra credit inquiry dated July 6 from one of the banks that declined was added to my credit report. I originally already received three hard pulls dated July 1st from each bank on my credit report.
Finance manager never told me they were fixing the error prior to me finding out about it and always told me it was sent correctly when asked about it. They admitted the income was sent incorrectly initially after I decided to speak with them in person where I showed them that my copy of the credit application had the wrong income. It makes me think they did not realized they made an error until after I made them aware of it. General manager of the dealership was made aware of the issue too by email. Even though they messed up, they didn't provide anything for the inconvenience.
My questions are what action could I take and who can I report it to.
1. Is there any repercussion for the finance manager for submitting the incorrect income and as a result I could have gotten approved for a loan with a better interest rate since I would not have been denied initially and left with only one approved loan to choose from?
2. Is the finance manager allowed to submit the credit application and obtain my credit reports on July 1st even though they did not receive signed consent until the following morning?
3. Is the underwriter allowed to add a zero to the end of my income without verification to finalize the deal for a car that only has 20% left to be paid, but initially received the wrong information from the finance manager of the dealership?
4. Is the finance manager allowed to submit the credit application and obtain my credit reports on July 6th even though they did not receive signed consent ever and as a result added another credit inquiry to my credit report? Is there any repercussion for an unauthorized credit inquiry? If the finance manager claimed they fixed the error and got a callback on the July 5th about the approval, why was it necessary to make another credit inquiry on July 6th when I met her? I did not need an auto loan anymore since the vehicle has been paid off on July 5th and the deal was finalized with the bank that provided the loan.
Welcome to MyFico forums.
When posting it's best to try to keep the post as short as possible and straight to the point. Your post has alot of view but not replies because, no offense, it's hard to make it through all that.
In answer to your questions:
1- Not really, honest mistakes happen
2- That credit application you filled out July 1 likely had consent to submit the app in small print, and if not there's implied consent, you filled out a credit app which implies you are giving consent to apply for credit on your behalf
3- Not really, and I'm surprised they added the "0", most underwriters are very strict and would require you to submit corrected info. But it's not a crime.
4- The forms car dealers have your sign give them broad authority to take actions on your behalf, and fighting an extra inquiry is not worth the battle. It's just a fact of life the applying for credit at a car dealer is going to result in multiple inquiries
Enjoy your new car and let it go.