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Got Pre-approved for Car loan - 4 hard credit hits?

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  • Sep 18th, 2014 10:38 am
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Got Pre-approved for Car loan - 4 hard credit hits?

I've been recently looking for a car, and I was pre-approved for financing through a dealer in town. I currently have free equifax monitoring from the home depot breach, so I was reviewing my credit application, and noticed four hard credit hits affecting my score. One from the dealer directly, one from TD, one from BMO and two from Scotiabank (I'm not with any of these banks) They are all from the same day.

Is that typical for a car dealer to try and set up financing for you through four different banks to get the best rate, or is something fishier in play here?

Thanks

-Adam
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amace wrote:
Sep 17th, 2014 6:40 pm
I've been recently looking for a car, and I was pre-approved for financing through a dealer in town. I currently have free equifax monitoring from the home depot breach, so I was reviewing my credit application, and noticed four hard credit hits affecting my score. One from the dealer directly, one from TD, one from BMO and two from Scotiabank (I'm not with any of these banks) They are all from the same day.

Is that typical for a car dealer to try and set up financing for you through four different banks to get the best rate, or is something fishier in play here?

Thanks

-Adam
Auto dealers don't rate shop.
The practice is called shotgunning.
Either the dealer's finance office performs shotgunning every application to all their captive financiers to try secure financing or you we're decline financing from one financier so the dealer sent app to another. Having been declined from them too they sent to 3rd, then 4th financier etc etc.
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
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amace wrote:
Sep 17th, 2014 6:40 pm
I've been recently looking for a car, and I was pre-approved for financing through a dealer in town. I currently have free equifax monitoring from the home depot breach, so I was reviewing my credit application, and noticed four hard credit hits affecting my score. One from the dealer directly, one from TD, one from BMO and two from Scotiabank (I'm not with any of these banks) They are all from the same day.

Is that typical for a car dealer to try and set up financing for you through four different banks to get the best rate, or is something fishier in play here?

Thanks

-Adam
How do you see who did a hard credit on you. I have the HD Equifax and says there are 4 recent but I cannot click it or something to see who did it.
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masoud100 wrote:
Sep 17th, 2014 8:44 pm
How do you see who did a hard credit on you. I have the HD Equifax and says there are 4 recent but I cannot click it or something to see who did it.
If you click on reports, it will show you exactly who has done hard and soft hits on you. Hard hits are the ones that hurt the credit score, so I'd imagine I was knocked down 10-15 points that day alone!
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mikeymike1 wrote:
Sep 17th, 2014 8:02 pm
Auto dealers don't rate shop.
The practice is called shotgunning.
Either the dealer's finance office performs shotgunning every application to all their captive financiers to try secure financing or you we're decline financing from one financier so the dealer sent app to another. Having been declined from them too they sent to 3rd, then 4th financier etc etc.
But why the two from one bank? You'd think banks would know better than to keep hitting your credit like that?
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amace wrote:
Sep 17th, 2014 9:10 pm
But why the two from one bank? You'd think banks would know better than to keep hitting your credit like that?
Two? which two?

You only mentioned 'One from the dealer directly' - which would mean manufacturers subsidized finance arm.
Then TD, BMO and Scotia.

The directive for accessing your bureau for the purpose of securing credit comes from the auto dealers finance dept. 'unless' you went to one of those banks and applied for either a personal loan or LOC on your own.
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mikeymike1 wrote:
Sep 17th, 2014 9:23 pm
Two? which two?

You only mentioned 'One from the dealer directly' - which would mean manufacturers subsidized finance arm.
Then TD, BMO and Scotia.

The directive for accessing your bureau for the purpose of securing credit comes from the auto dealers finance dept. 'unless' you went to one of those banks and applied for either a personal loan or LOC on your own.
There were two consecutive hits from Scotia
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amace wrote:
Sep 17th, 2014 9:26 pm
There were two consecutive hits from Scotia
Is one inquiry from Scotiabank and the other from Scotia Dealer Advantage(Scotia SDA)?
Phone numbers different? Dates? same day or days apart?
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I've spoken to Equifax directly about this in the past (on two separate occasions).
If you are looking to get auto financing, you actually have a 2 week window where any number of companies/institutions can do a credit check and it will still count as a single hard hit on your bureau. The key is that they all must be auto loan related.

Off topic, the same goes for mortgage shopping except you have a full 30 days of freebies. You can have 50 institutions check your credit within a 30 day period and as long as they are all checking it for the purpose of approving a mortgage, then it all counts as a single hard hit.

If your credit gets hit today for an auto loan, and next week for a mortgage, that will count as 2 separate hard hits on your credit.

So, if all these hits were all auto loan related, and all done within a 14 day window, then don't worry about it. It all counted as a single hard hit. Of course if one was for an auto loan, then the next was for an unsecured line of credit (but you were going to use it for buying a car), i'm fairly certain that counts as two hard hits because the line of credit is not "auto loan" specific.
If you have questions about it, simply call Equifax and i'm sure they can provide you with some more information.
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Babypimpin wrote:
Sep 18th, 2014 2:09 am
Off topic, the same goes for mortgage shopping except you have a full 30 days of freebies. You can have 50 institutions check your credit within a 30 day period and as long as they are all checking it for the purpose of approving a mortgage, then it all counts as a single hard hit.
I had heard this too, but while I was shopping around last year for renewal of my mortgage I had 3 different hits related to the mortgage within a month and each hard inquiry dropped my score by a similar amount. I was monitoring my score through equifax. It seems theory doesn't always translate into practice.
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amace wrote:
Sep 17th, 2014 9:10 pm
If you click on reports, it will show you exactly who has done hard and soft hits on you. Hard hits are the ones that hurt the credit score, so I'd imagine I was knocked down 10-15 points that day alone!
With the one year plan from the HD breach, you can update your score daily if you feel like it (unlimited), you should be able to see exactly how those hits affected you based on your score before and your score now.

Just click "update report" and "get a new report", then "submit order" (for $0.00). It will then show your updated score.
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cbt123 wrote:
Sep 18th, 2014 2:35 am
With the one year plan from the HD breach, you can update your score daily if you feel like it (unlimited), you should be able to see exactly how those hits affected you based on your score before and your score now.

Just click "update report" and "get a new report", then "submit order" (for $0.00). It will then show your updated score.
Yes, trouble is that I only just signed up for the monitoring yesterday, while the credit hits were from August.
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+1 I was just gonna ask this question.

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