Fast Financing Could Wreak Havoc on Your Credit | NBC Chicago
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Fast Financing Could Wreak Havoc on Your Credit

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    NEWSLETTERS

    One in five Americans have an error on their credit reports that could tie up their financial well-being, with most learning of them well after errors are sent to credit bureaus. NBC Chicago's Lisa Parker investigates. (Published Tuesday, Jan. 20, 2015)

    For Kristina Valentine, picking out a used Jeep at a car dealership was the easy part. The tougher job was figuring out financing.

    “We settled on a price and then I just had to wait to get into the finance office,” Valentine said.

    The Palatine woman said Napleton’s Chrysler Jeep Dodge in Arlington Heights told her they would try to find her financing fast and then turned over an hour-glass timer, promising to get the job done before it ran out. Valentine said she was told if the timer ran out, she’d get a free oil change.

    But that delay would have longer lasting effects on Valentine’s life. The first sign surfaced in the finance manager’s office.

    “He was chuckling because they had butchered my name,” Valentine recalled.

    Valentine soon learned both her first and last name was misspelled by the dealership when they sent credit inquiries on her behalf. Instead of Kristina Valentine, the dealership wrote “Kritiano Valitine.”

    Nine hard inquiries into her credit were sent by the dealership, over and over again with the wrong name.

    The practice of sending requests to multiple lenders itself is not uncommon. In fact, there’s even a name for it: shot-gunning credit.

    “This is what they call shot-gunning your credit around,” credit expert Gary Novel said. “They don’t tell you that and the only way you find out about it is if you happen to look at your credit report.”

    By shot-gunning your financial details, dealers get you the best rate or the fastest answer. But every request they shoot off, you get a hard inquiry that can ding your credit for about 90 days.

    The real problems surface when shot-gunning and mistakes mingle. In this case, the dealership got Valentine’s name wrong but her social security number right.

    “Everybody is so quick to mess you up but nobody wants to help you fix the mistakes,” Novel said.

    One in five Americans have an error on their credit reports that could create chaos for their financial well-being. Most don’t learn about it until well after errors are sent to credit bureaus.

    Kristina Valentine was standing right there at the dealership when the mistake was made and months later is still trying to clean up the mess.

    “Not only did she take a hit on her credit report,” Novel said, “But now she’s going to have an AKA on her credit file with the incorrect spelling of her name that’s going to follow her around.”

    Inquiries made in error are not easy to erase. The businesses that make them can help expedite the process but are not required to.

    In this case, Napleton’s Chrysler Jeep Dodge in Arlington Heights would not answer questions for comment.

    One employee told NBC 5 Investigates the general manager was “too busy selling cars to handle the problems of one customer.”

    So, NBC Chicago asked an auto industry expert to weigh in.

    Randy Henrick of Dealertrack Technologies said shot-gunning credit is not the norm.

    “Dealers highly value their relationships with lenders,” Henrick said. “Sending credit apps to lenders that will not be approved or whose credit offers the dealers will not use can have severe adverse consequences to the dealer’s relationship with the lender.”

    Henrick added Lenders don’t like to receive applications they won’t approve.

    “The look to book ratio is very important to both dealers and lenders and cuts against shot-gunning,” Henrick said.

    So how can a car buyer avoid getting their credit dinged by shot-gunning?

    Experts say consumers armed with this information should tell a dealer they do not want multiple inquiries sent on their behalf without specific authorization.

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