Shopping for credit can actually hurt your chances of success … Ezee Credit uses a focused approach to get you approved.

DOWNSIDE TO CREDIT SHOPPING

Each time you apply for credit, it is affecting your credit rating, either directly or indirectly. Normally, each time someone requests a copy of your credit report, your credit score is affected. In cases where the frequency of credit inquiries in a given time period is considered above normal, your credit score will actually go down.

Multiple inquiries are viewed with caution because it indicates someone is repeatedly seeking credit. It can also indicates someone may be taking on too much credit in too short a time period. As a result, too many inquiries generally hurts your credit score. The FICO credit scoring models have guidelines regarding consolidating more than one inquiry received within a short time period into one inquiry for credit scoring purposes. This is done to reflect the fact that a borrower may seek credit from more than one source for the same loan. Each lender who requests your credit bureau, however, still shows as a unique and independent credit inquiry on your credit bureau report.

If you are unsuccessful in getting approved at that time, or decide not to proceed with someone you applied to, you will likely be faced with more credit score erosion when you apply for credit at a later date.

CREDIT INQUIRIES UNDER SCRUTINY

Often, when people are applying for bad credit auto loans, their credit scores are too low for automatic approval by credit score alone.

In these circumstances, the credit bureau is then scrutinized more closely and subjectively by each lender you seek credit from. Lenders, when looking at credit bureaus, can easily be negatively influenced by seeing too many credit inquiries. It is only human nature. They become wary of people with too many inquiries as it appears they are desperately seeking credit. The lender can conclude, rightly or wrongly, that you have been repeatedly turned down.

The lender will also see what other lenders you have applied to. Because they know who their competition is and what kind of credit requirements they have, opinions are also drawn regarding your credit worthiness. The lower the perceived ranking of lender showing on your credit bureau, the more suspect your credit worthiness becomes. As a result, lenders can begin to wonder what they are missing if the person has so many inquiries, especially to second or third tier lenders, without success. As a result, they are less inclined to approve the loan on favourable terms, if at all.

For these reasons, too many inquiries can actually make getting a bad credit auto loan increasingly difficult for you.

THE MULTIPLE INQUIRY TRAP

You can end up with multiple inquiries without intending to or even being aware that it has taken place.

One way is to apply to the wrong site on the internet that turns out to be nothing more than a lead generator who is trying to get you approved to improve your value to a purchasing dealer. It can also be from applying through a dealer who uses a shotgun approach and applies everywhere on your behalf to see what you may get approved for and on what terms.  If you apply to more than one lead generator, or dealer, you can even have the same lender repeatedly look at your credit within a short period of time with the same negative outcome.  And each multiple inquiry then remains on display for future prospective credit sources to see and wonder about.

If you are successful in getting approved, you may be all right this time. But if they fail, and they don't have any other alternatives for you, they can leave you far worse off than when they started.

Before applying on line, or to a dealer, make sure you are making the right choice.

THE EZEE CREDIT APPROACH

The way Ezee Credit tries to minimize the negative effects of credit shopping is by trying to carefully evaluate your circumstances before sending your application anywhere else. We only pull one credit bureau to start with to properly assess your circumstances. Then, we review your application in detail before moving forward with your application.

This is where our experience can help you make the most of your circumstances today and in the future. We try to identify the lender who is your best choice for your circumstances and the vehicle you want. We will try there first. We may select two lenders if we believe it will improve your chances of getting better terms. However, we generally start with the lender we think offers the best terms and who will give you a realistic chance of being approved.

Of course, with our in-house leasing program, we often don't need to do more than one inquiry if our program works the best for you as it does for many of our customers. This leaves your bureau relatively unblemished while still showing your credit progress to other lenders as we report to the Equifax credit bureau your progress on paying off the lease.  Further, you will have retained all of the other lenders for future, alternative needs, by using Ezee Credit which is focused exclusively on automotive financing.