If you are in the market for a new or used car, the saying “Buyer beware” is probably in the forefront of your mind. As a prior car salesperson, I can tell you to listen carefully to those two little words from the moment you walk onto the car lot until you hold your new keys. I will also add my husband and I met at work as salespeople-I since retired but he is now a sales manager. I guess you see who was better in the industry,
I say this because as he was working up the ranks (if you can use that term given car salespeople and their reputation) we both were those lovely and revered ‘Finance Manager’ folks you dealt with once you agreed on purchasing. The paper pushers maybe rings a bell.
As you may or not be aware by signing all those forms you agreed to allow the F&I manager to get your loan bought by the lowest bidder. However, if you looked at your credit file shortly after the new car smell dissipates you may have been surprised to see a subset drop in your scores, as well as a lengthy list of hard pull inquiries. Depending on a variety of factors, the amount posted can be as little as one or as many as 20 or more.
It seems a bit excessive considering you only need one loan, correct? It does help in getting you better terms and rates, but more than likely you won’t be saving more than a few points in interest. Of course, rates vary on whatever the market sustains at any given time, and like I mentioned, the higher your credit score the better terms of your loan-as with all things credit.
The good news is you can stay in control of this situation. It is YOUR loan, and you are not obligated to anything until you sign on the dotted line.
Credit Clue #2- Before hitting the auto mall or strip, do your due diligence. Knowledge is power.
Shop for your own loan. Go to your bank, check online, and if you have prior auto loans with good payment history contact them and let them know you are in the market-and expect better terms also! Pay attention to car commercials and ads for specials on financing, 0% interest or down payment; and of course ask around your circle of friends, family, and the car guy a few houses away from you. They are certainly going to jump at the idea of making a sale with someone in their warm market.
Credit Clue #3- No matter how many banks/auto financial institutions/ lenders viewed your credit file which resulted in an inquiry, it is your responsibility to contact the credit reporting agencies (Experian, TransUnion, and Equifax) to remove them.
It is legally their responsibility to do so as long as the inquiry did not result in an approval. It is also your responsibility to provide any and all documentation to back up your dispute. It may take a month or two but 10-15 points per inquiry can be a huge loss or a needed gain!
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