[hfur]

Been shopping for a car, running numbers, couple different dealerships, prices, options, etc...finally found what i was looking for, they ran my credit to set up a payment, and whoa! my credit score dropped tremendously...2 questions:1. - How can this be allowed to happen? 2. - what can one do get the credit score back up to where it was before inquiry? I only have two things on credit. Car payment where I have never missed a payment, and a credit card with a 10,000 credit limit, and never carrying a balance. No missed payments ever in the last 5 years.? Any financial advisors out there? Anyone else have this happen too?

[SirJangle]

Recent inquiries do impact your credit negatively. I don't know why or even agree with it but this has been the case for as long as I can remember. Also, not having enough credit will impact you negatively. Seems there's a fine line to walk here and it can get confusing as to what you're supposed to do. Also, owning a house seems to positively impact your credit.

[nancygrl]

If your credit gets run, even if you don't purchase something, score drops. Never liked that part of the system. How many times was it run?

[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.

[RyanR623]

Originally Posted by nancygrl

If your credit gets run, even if you don't purchase something, score drops. Never liked that part of the system. How many times was it run?

This is not the case. The credit bureaus give you a certain amount of inquiries over a certain amount of months. Once you go over that magical (stupid) quota then your score drops. But not by much.

OP you literally only have a car which you never missed a payment on, and a CC with no balance? Define "tremendously". Something had to have happened between the last time you ran your credit and the time the dealer ran it. Are you sure you don't have any negative items on there? I bought a new wrangler in 2014. After the deal was all done, the finance manager said "by the way, do you know you have a collection on there from an unpaid photo speeding ticket?" I was shocked, i never even got it in the mail.

[kropscamaro16]

there is soft ones and hard ones and hard ones do hurt you but if your not serious they shouldnt be doing that shit...

[KenMaro]

Another wonderful thing about our credit system: when you complete your loan pay off (no longer in debt for the car) your credit score will drop. You will actually have a higher credit score while making consistent payments on the loan, while in debt, then you will afterwards.

Just the beauty of the system. They want you in debt using credit it gets you a higher credit score. Long credit history with the same card is better than a lot of short term credit history with multiple cards. So don't open and close cards too often. Real estate (mortgage) history is very good to have... as long as you are not missing payments often (which is true for any of the credit you have).

My credit dropped nearly 20 points when I completed my loan term.

[ember1205]

Originally Posted by RyanR623

This is not the case. The credit bureaus give you a certain amount of inquiries over a certain amount of months. Once you go over that magical (stupid) quota then your score drops. But not by much.

OP you literally only have a car which you never missed a payment on, and a CC with no balance? Define "tremendously". Something had to have happened between the last time you ran your credit and the time the dealer ran it. Are you sure you don't have any negative items on there? I bought a new wrangler in 2014. After the deal was all done, the finance manager said "by the way, do you know you have a collection on there from an unpaid photo speeding ticket?" I was shocked, i never even got it in the mail.

Sorry, but your statement is not completely accurate.

There is not "certain amount" that you are allowed - hard inquiries have a direct and negative impact on your credit score, period. Depending on how many inquiries you have had over what period of time and what those inquiries have resulted in will ultimately determine exactly how much impact to your score you will see as a result.

I have flawless credit, with a hard inquiry from last fall when I bought a car. This spring, I had two more hit my record to buy another car. All of them resulted in a small, negative impact on my score which I recovered from in fairly short order because I keep my CC utilization at under about 4%.

As an aside, this member has a history of posting new threads and asking questions, providing few details, and then never returning to the conversation.

[nancygrl]

Originally Posted by ember1205

As an aside, this member has a history of posting new threads and asking questions, providing few details, and then never returning to the conversation.

You noticed that too, eh. He's posted about at least 3 cars he's interested in so far since the end of July.

[ember1205]

Originally Posted by nancygrl

You noticed that too, eh. He's posted about at least 3 cars he's interested in so far since the end of July.

Yup. Also has his location listed as "NE" but the one dealership he mentioned talking with is in Mid-Atlantic (VA).

His posts all seem to be "I need help right now!" critical, but no one ever hears back from him. He's going to land on my ignore list...

[MrChrisLS3]

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.

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.

[ember1205]

Originally Posted by MrChrisLS3

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.

A mortgage alone will have you over that amount quite frequently.

Did you mean to say that if the car alone represents more than about 15% of your gross monthly income?

[Petrol Head]

Originally Posted by RyanR623

This is not the case. The credit bureaus give you a certain amount of inquiries over a certain amount of months. Once you go over that magical (stupid) quota then your score drops. But not by much.

OP you literally only have a car which you never missed a payment on, and a CC with no balance? Define "tremendously". Something had to have happened between the last time you ran your credit and the time the dealer ran it. Are you sure you don't have any negative items on there? I bought a new wrangler in 2014. After the deal was all done, the finance manager said "by the way, do you know you have a collection on there from an unpaid photo speeding ticket?" I was shocked, i never even got it in the mail.

When I bought my Camaro my credit score dropped 30 points on the loan, and I have impeccable credit and haven't had a single credit check for over 5 years when I locked it at all three bureaus.

Now, it's been coming back up (not that what it went down to was even that bad because it was pretty much perfect), but yes your credit score will go down with every, single, inquiry. Fact.

For the OP, never EVER file for a credit app for a car unless and until you've finalized the deal to actually purchase the car. I mean, you have the purchase order written up, you and the salesman both have signed off that you agree on that price, and the car is actually sitting there with the temporary tag on it. When you have your down payment check in hand is the time you apply for credit.

YES not until THAT POINT!

[ember1205]

Originally Posted by Petrol Head

For the OP, never EVER file for a credit app for a car unless and until you've finalized the deal to actually purchase the car. I mean, you have the purchase order written up, you and the salesman both have signed off that you agree on that price, and the car is actually sitting there with the temporary tag on it. When you have your down payment check in hand is the time you apply for credit.

YES not until THAT POINT!

Here's the thing...

When you have excellent credit and low credit utilization, and you know exactly what your credit score is (and it's above 750), this is 100% feasible. For anyone with a lower credit score or higher utilization, or that has negative comments on their credit report, this may not be completely attainable.

I agree with the premise, and it's exactly how I handle the process myself. There are a lot of car lots that simply won't put that much effort into the deal until they know it will close, and that may require a hard inquiry.