A Calgary man says his credit score plunged 132 points after a car dealership shopped around to finance a new car that he didn’t end up buying.
Blair Geddes picked out a Sonata at Calgary Hyundai earlier this summer. He says the dealership’s finance department told him his credit score was “amazing,” and promised he would have no trouble qualifying for the new sedan.
They changed their tune a few days later, saying they could not secure a loan.
When Geddes’ score was pulled by another dealer, he found out his rating dropped from 761 to 629 because his credit report was pulled 11 times by lenders contacted by Calgary Hyundai.
“It’s affected everything,” he told CTV Calgary. “You need a 700 score even to get a house. I couldn’t even do that now because of the 11 hits they did in one day.”
Credit counsellor Nadia Graham explains dealerships typically solicit between two and five different lenders. That could impact your credit score because a sudden spike in inquiries could make the credit bureau think you are scrambling to borrow on short notice.
“It doesn’t know that those are all looking for one vehicle. It could be 11 different credit cards you’ve applied for,” she said.
Calgary Hyundai said they were only doing what Geddes instructed.
“My finance team continued to submit to other lenders in order to secure approval,” General Manager Thomas Powell said in a statement. “We had no intention of harming the customer in any way, shape or form. We only did what the customer asked us to do.”
There are no regulations on how many lenders a dealer should contact on behalf of customers, according to the Alberta Motor Vehicle Industry Council.
Graham advises customers to outline clear instructions for how a dealer should handle their credit application.
“If the dealership is going to pull your bureau anyway, which is what happened in this case, ask the dealership to send that credit bureau out with the application for financing,” said Graham. “If the dealership does not have a membership in the credit bureau, and they cannot pull a person’s credit bureau, instruct them to send it to two and then get back to you.”
With a report from CTV Calgary’s Lea Williams-Doherty
