Topic: Leasing - credit check question

[aesop]

I leased a 2007 Honda DX-G today but had a question about credit checks when I looked a vehicles.

For Honda I was honest with the information given for the credit check.

For Toyota and Ford just for giggles I gave an incorrect address, never asked for pay statement so I understated my pay and no SIN was asked.

The managers at Toyota and Ford said they would have to do a credit check, not a problem go right ahead.  With 5 minutes both dealers said I was approved.

How is so that I am approved with a "credit check" when the information given was false. I would of been honest if they they asked for my license up front.

[quadzilla]

I'm more curious as to why a dealer would have to do a credit check if you didn't buy a car from them?

[aesop]

I'm more curious as to why a dealer would have to do a credit check if you didn't buy a car from them?

My intent was to lease a vehicle form either Toyota and Ford.  I wanted to know up front if I would qualify for a lease before I would consider leasing from them.

Honda was very hesitent on doing the credit check first before I would consider discussing the Fit or Civic. I refused to put a refundable $500 down as I had the 2 vehicles in mind.

Checked with Equifax and there was a credit check done by Honda Canada but nothing from Ford or Toyota.  So does Ford and Toyota actually do a credit check?

[inco]

I suspect they were calling your bluff.

When you sign and put money down your a serious buyer and that's when the wheels start turning. Since they also have to pay for a credit check, they might as well wait until they know you are ready.

[Cord]

I suspect they were calling your bluff.

When you sign and put money down your a serious buyer and that's when the wheels start turning. Since they also have to pay for a credit check, they might as well wait until they know you are ready.

Bingo!

[wing]

Yup they didn't bother checking because you would be approved no matter what, even if you can't get credit you'll get it, but at 25%

[jcon]

It's a bad idea to have credit checks done when you're not actually serious. Each credit check, as far as I understand, shows up on your credit report in a negative fashion. I'm not entirely clear why, but I've told it does.

[Jameel]

It's a bad idea to have credit checks done when you're not actually serious. Each credit check, as far as I understand, shows up on your credit report in a negative fashion. I'm not entirely clear why, but I've told it does.

I’ve heard that as well, apparently every time a credit check is done this lowers your overall score.  I assume the reason being, if a credit check is done, they assume you are purchasing something, which in turn reduces your buying “power”.

[UmroAyyar]

Very informative article on what happens to your credit report. If you care about it, read it.

http://www.cbc.ca/consumers/market/files/money/credit/score.html

[Cord]

So the woman in that article gets here credit card declined at a hotel and blames it on a mistake on her credit bureau? What a crock. Hotels don't have access to your credit score. Obviously this woman had maxed out her card and cries that it wasn't her fault.

“To my shock and pure embarrassment, they put it through the system and said, ‘No, I’m sorry, we can’t take that,’” Berry recalls.

“It just made me feel like a very, very small person, and not worthy of being on this business trip, of doing what I was doing.”

She should've been embarrassed. She was was trying to pay for her hotel with money she didn't have. Of course this has nothing to do with her crdit score. This is typical of many people with poor credit - blame anyone but themselves for the problem.

People have to learn that they are responsible for their financial decisions. Too many people in this country believe they have some god given right to borrow tens (sometimes hundreds) of thousands of dollars.

I've seen thousands of credit bureaus and mistakes that cost someone a car loan are very rare. When a credit bureau shows a previous bankruptcy, a repo'd car, maxed credit cards, and a collection from Money Mart, the reson for being declined isn't because of a mistaken duplicate entry.

[The Mighty Duck]

Great link, Umro!

Every time you apply for credit, a “credit inquiry” will be made on you – you want to keep the number of those inquiries to a minimum as m ore than one or two inquiries per year will make you a higher credit risk and lower your credit score.

http://www.cbc.ca/consumers/market/files/money/credit/tipsscore.html

A dealership doing a credit check would certainly fit this bill, so if you're shopping around and leaving your license with every dealer, chances are your score will fall.  Keeping that in mind, I would avoid giving dealers any information until you know you're ready to buy.  One or two credit checks won't hurt, so chose the car before you start having credit checks done. 

[jcon]

And ultimately you should know whether or not your going to qualify for credit. You should only be giving it once.

AND one final thought...

Each time you give different information they update your credit information. So it may look as though you've had multiple addresses, which never looks good. In fact, if you haven't filled out a credit application in a long time your information may be out of date (like address, occupation, salary, etc.)... I'm thinking of a particular cat person who used to frequent this scratching post, who probably benefited from Ontario's new minimum wage hike. 

[UmroAyyar]

Well, check your credit report, atleast once a year. Its free. (The scores you'll have to buy).

[articsteve]

I'm more curious as to why a dealer would have to do a credit check if you didn't buy a car from them?

My intent was to lease a vehicle form either Toyota and Ford.  I wanted to know up front if I would qualify for a lease before I would consider leasing from them.

Honda was very hesitent on doing the credit check first before I would consider discussing the Fit or Civic. I refused to put a refundable $500 down as I had the 2 vehicles in mind.

Checked with Equifax and there was a credit check done by Honda Canada but nothing from Ford or Toyota.  So does Ford and Toyota actually do a credit check?

Checked with Equifax and there was a credit check done by Honda Canada but nothing from Ford or Toyota.  So does Ford and Toyota actually do a credit check?

Could have gone thru TransUnion.

[Cord]

Checked with Equifax and there was a credit check done by Honda Canada but nothing from Ford or Toyota.  So does Ford and Toyota actually do a credit check?

Also, this is an issue with the particular dealerships you went to, not with Ford and Toyota.

[Damien]

If you do multiple credit checks in a very short period of time, like one day or so.  Only one hit will show on your bureau.

It is HORRIBLE for your overall beacon score to have repeated bureaus pulled.

I have been in finance for a few years and have seen first hand someone's beacon score go from the mid 600's (solid)to 490 (Very poor) in two weeks car shopping.  The guy came in for a mortgage, had nothing durogetory on his bureau other than multiple inquiries by every dealership in town. 

I would suggest you stop "shopping" around.

One other thing to note is there is something called a "soft" hit on your bureau that will not show up as a hit.  Could be thats what the other dealers have with the reporting agencies.  It only generates an internal note to the dealer saying "yes" or "no".  Without details.

Lastly as someone mentioned, it could have gone to transunion or equifax or vice versa.

[Cord]

If you do multiple credit checks in a very short period of time, like one day or so.  Only one hit will show on your bureau.

I have to disagree somewhat on that one. A bureau will show every store someone has has shopped at, even if they were all from the same day. Now, a dealership cannot grant credit so perhaps simple credit checks don't count the same way an inquiry by an actual lender would. Perhaps these are the soft inquiries mentioned.

One thing I've noticed happening more and more over the last couple of years is the phenomenon of people continuing to shop after supposedly completing a deal at a dealership. These people's credit gets brutalized in this process. Here's why: They go to a dealership and write up a deal on a car and submit credit information. In the process of getting the deal approved, the dealership will pull a credit bureau and they may send the deal to multiple banks to see which one will grant the best approval. In the meantime, the customer continues this process all over town and even though they think they are being smart shoppers and have maybe even managed to do this without having to leave deposits. By the time they reach the third store they may have half a dozen or more credit inquiries from banks and dealerships on their bureau. The bank labels them as a "credit seeker" and either declines them or offers a much more strict approval (higher interest rate, more down, etc.)

[Damien]

Multiple inquiries within a short amount of time, like when you are shopping for a mortgage, are grouped together to lessen the impact. The actual impact depends on the number of inquiries, time period and other factors on your credit profile.

Transunion.ca