Inquiry question

[Anonymous]

Hello All,

To make a long story short, I was in the process of buying a car from a dealer but they ended up selling the car before I could buy it. (I was going to check rates with my CU)  I had filled out some paperwork at the dealership but made it clear i did not want them to run my credit as I would be financing through my CU.  Sooo of course I get my score from myfico a couple days ago and it lists that dealership under my "inquiries" section.  I am guessing that dropped my score? Anything I can do? I didnt even purchase the car from them but they ran my credit? UGH!

[RobertEG]

The FTC issued a detailed staff opinion letter back in 1998 addressing when an auto dealership can assert permissible purpose, and thus pull your credit report.

The cite is Coffey (2/11/98) and can be found on the FTC web page under FCRA staff opinion letters.  While only their position, it gives food for dispute.

An excerpt gives the gist:

"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. 

 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."

[llecs]

Per FICO scoring, it did not hurt your FICO. It didn't hurt because FICO takes all but one inquiry and ignores the extras if you apply more than one time within a certain time frame. That time frame varies by FICO version and CRA and is generally 30-45 days on the newer FICO models. So, let's say you app 50 times in a month, then FICO ignores 49 of those inquiries. Same applies to SLs and mortgages. It didn't hurt because you were going to check with the CU anyway.

IMO, inquiry damage is overrated. It will tend to ding if you are app-free for a year and/or have higher scores. YMMV of course based on your credit. I used to have 30+ on EX and EQ but never lost any points after my first couple of inquiries.

If you decided after the car sold that you never wanted to buy a car, then maybe there's an issue there. Did you give the lender any info like your name or driver's license? Generally they'll run your credit once they have that info. There are some examples in here of car tags being ran and via skip tracing, the owner's credit gets pulled. They can be sneaky. You can always ask them to retract it.