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FDP Forum / Moe's Tavern (_8^(I) / Car purchase - credit inquiry question

Surfinboy
Contributing Member
**********
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USA

Practice!
Jul 6th, 2018 07:55 AM   Edit   Profile  

We just purchased and financed a car from a Toyota dealership and it resulted in no fewer than 5 inquiries on my credit report - one from the dealership, one from a credit union, one from a bank and two from separate Toyota financing companies. Within a day my credit score dropped 40 points. Is it me or is 5 credit inquiries for one car purchase excessive?

dudesweet157
Contributing Member
*******

Greensboro, NC

You're the reason our kids are ugly
Jul 6th, 2018 08:07 AM   Edit   Profile  

I used to work in financing at a furniture retailer. When multiple hard inquiries are put in within the same short period, it only results in a single hit to your credit score. If my recent experience obtaining financing through my credit union is any indication, a 40 point drop is pretty typical of a hard credit inquiry. Thankfully, mine bounced back to it's previous level after 3-4 months.

I'm guessing that the finance manager at the dealership just threw your application to all of their lenders at the same time to see what would stick versus starting with their best lender, waiting to hear a response, then moving down the list. If you qualified for their best lending rate, then it was all for naught, but there was no way for them to know that you would get approved for it ahead of time. Feeding your info to all of the lenders at the beginning of the process potentially saved hours of time waiting and ensured that your sale was made that day instead of being stretched out over several days and potentially driving you to a different dealership. I'm also 100% sure that they had you sign a document stating that that was what they were going to do and that you consented to it beforehand. However, whether they fully explained to you verbally that that was what they were doing is a different matter altogether.

Surfinboy
Contributing Member
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USA

Practice!
Jul 6th, 2018 08:11 AM   Edit   Profile  

That's helpful dudesweet and makes sense. Thanks!

dudesweet157
Contributing Member
*******

Greensboro, NC

You're the reason our kids are ugly
Jul 6th, 2018 08:30 AM   Edit   Profile  

No problem. I'm not useful for many of the questions asked here, so I'm just happy I could help.

Chris Greene
FDP Host

Idaho, USA

I miss Kelbo's
Jul 6th, 2018 08:37 AM   Edit   Profile  

Don't forget, the dude is also our resident wet shaving expert.

Taildragger
Contributing Member
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USA

an acquired taste some may never acquire
Jul 6th, 2018 09:02 AM   Edit   Profile  

So then...wet shaving DOES affect ones credit?

Gato
Contributing Member
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Southern Calif

Jul 6th, 2018 09:09 AM   Edit   Profile  

I bought a new car for cash in January.
Told the salesman up front ... no credit ... all cash.

But before I got out the door, they tried TWICE to sneak a credit inquiry ok into the paper pile for me to sign. I refused.

When I called him on it, the sales manager sniffed that a cash purchase like mine requires a credit check due to the Patriot Act. (it doesn't)

He became quite indignant when I showed him the list of common car dealer scams.
Using the Patriot Act as a credit excuse was first on the list.

(This message was last edited by Gato at 11:09 AM, Jul 6th, 2018)

Chris Greene
FDP Host

Idaho, USA

I miss Kelbo's
Jul 6th, 2018 09:18 AM   Edit   Profile  

Gato, we went through something similar when we bought a close out Camry a couple years back. I didn't let them run a credit check as we were paying cash. Lord knows, they tried.

larryguitar19
Contributing Member
*****

South Florida

larryguitar
Jul 6th, 2018 10:23 AM   Edit   Profile  

I watch my credit score with the FICO.com type thing. I typically carried about 35% to 40% on my credit cards.

I decided to just pay them all down to practically zero. It wasn't a motivation but I expected my score to rise. But the next month my score dropped 40 points.

No late payments or inquires or collections. No other plausible explanation.

(This message was last edited by larryguitar19 at 12:26 PM, Jul 6th, 2018)

Chris Greene
FDP Host

Idaho, USA

I miss Kelbo's
Jul 6th, 2018 10:27 AM   Edit   Profile  

Well, we pay our credit charges in full each month and my personal credit score is above 850. Scores are not only based on how good you are about paying timely but also how much credit you have vs. income. If you have too many cards, the credit gods look at your income and wonder what sort of trouble you can get into with a high debt limit.

Thommie
Contributing Member
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Dallas, Texas

Patron Saint of Mediocre Bass Players
Jul 6th, 2018 11:33 PM   Edit   Profile  

I am a dispute agent for Experian. Although we are not licensed credit advisors, I have read a lot about this stuff and also observed some things.

According to our web site (Experian.com), all auto inquiries within a one month period are counted by most scoring models as being only one inquiry. The same with mortgage inquiries.

Surfinboy, your credit union and bank inquiries may not have been tagged as auto inquiries, so they may count as two separate inquiries.

Also, has the new account hit your credit report yet? A new account, adding new debt, may be a larger hit than a few inquiries. For FICO 8, which is the score given in our free memberships, the factors are:

35% payment history
30% amount of debt
15% age of credit
10% new credit (includes new accounts and inquiries)
10% mix of credit

A new auto loan could potentially hit you in both the "amount of debt" and "new credit" categories.

It's all a juggling act that's really hard to figure out. I guess that's why credit advisors need special training and licensing.

Plus, there are many scoring models that can spit out very different scores when run against the same credit report...

dudesweet157
Contributing Member
*******

Greensboro, NC

You're the reason our kids are ugly
Jul 9th, 2018 01:26 PM   Edit   Profile  

Chris Greene, I've been really bad about keeping it up lately. Only once every couple of days instead of everyday, and I've been forgoing the brush and soap for Cremo brushless cream more often than not as well. It's always with a safety razor, though. I've just about given up the straight razors (too much maintenance), and I haven't bought a cartridge in almost a decade, so I've got that going for me, I guess. :-)

Chris Greene
FDP Host

Idaho, USA

I miss Kelbo's
Jul 9th, 2018 02:59 PM   Edit   Profile  

When I get lazy or sick (like I am now), I still go back to the Norelco. Straight razors never appealed to me.

dudesweet157
Contributing Member
*******

Greensboro, NC

You're the reason our kids are ugly
Jul 9th, 2018 03:07 PM   Edit   Profile  

I feel you. I still think straights are beautiful. I'm just not dedicated enough to put in the time and effort it takes to keep them shaving sharp.

FDP Forum / Moe's Tavern (_8^(I) / Car purchase - credit inquiry question




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