Quote:
Originally Posted by Glen e
Something doesn’t make sense. The credit industry knows it when you go shopping for a car your credit can be run several times at different dealerships. That shouldn’t drop your score.
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Right. But there is a little more to it, as you know. Speaking Hypothetically, let's say that the OP is trying to trade in a vehicle that he is upside down by a fair amount on a vehicle that either has a loan value cannot carry or absorb the negative equity, or on a vehicle that is has a higher payment to income then the bank allows. When the dealership submits it to the first three lenders, they all decline it. It's not so much the hard inquiry that decreases the score, as it is the fact that it was declined.
Gotta be careful about what you're trying to buy. Even if you have a decent credit score, there's more to it than that. If you have negative equity, be prepared to cover 1/2 to 2/3 at least with a cash down payment.
If the car you're trying to buy is going to put you over 15 to 18% of your gross monthly income, you're going to have tough time getting approved.
Now, as far dealerships running credit. They can't do it until you sign the credit application and have your driver's license to back up your signature. If you fill out an online application, they can run a soft inquiry, but still need your Driver's license to submit to any bank.
However, once you sign the app and they get your license, you are giving them permission to submit. Most dealerships will not submit until you sign that little piece of paper agreeing to the price and payment terms. Then they submit it.
However, buying a big ticket item, like a car, it is expected to be submitted to multiple lenders. It is a collateral loan, and while it may lower your score, it only does so for a short time. Once you establish timely payments, it goes back. Now, if you're out there applying for every revolving credit card out there, and running up a high debt to income, that's another story.