Credit score ding right before financing :(

KettleOfHawks · Nov 5, 2015

Talk about a horrible start to my day...

I confirmed my order on 10/10 and am expecting production to start any day now. I'm getting ready to finance through Alliant and jumped onto Credit Karma this morning just like I do every day for the past year to make sure everything looks good. My heart absolutely sank when I saw a decrease of almost 100 points in my score since last week. Long story short, it turns out my wife had missed a payment on her GM car and it got reported as 60 days late. I took care of it with GM, but they said there is nothing they can do about the mark on my credit now. This dropped my score from mid-700's to mid-600's just like that. No other black marks on my report, plenty of credit history (mortgages, credit cards, etc.), low debt ratio, plenty of income, everything else is fine.

I emailed the details to my rep at Alliant, but I don't know if it is a simple black and white issue with them. They would be only financing 70% of the car, but I have a horrible pit in my stomach because of this. I don't know if I'm looking for advice or just venting.

So depressed...

Max* · Nov 5, 2015

I think what may happen is that you'll get financed at a higher APR. What you can do is take it, wait it out for your credit score to go back up, and try to refinance at that point if the rates make sense.

Good luck

Kandiru · Nov 5, 2015

Terrible, very sorry to hear!

May I suggest you enroll in Equifax with Credit Lock, enroll kids too.

In addition to reporting FICO score changes you will have peace of mind
as no one will be able to open accounts in your name without you first
unlocking your credit.

Never Government Motors for me, they killed SAAB (had 2 of those) and
propagate a standard of mediocrity, knowing that as long as they are in
bed with DC they will survive.

Sorry to hear, may want to contact both GM and FICO to settle this.

bonnie · Nov 5, 2015

If you have documentation from GM that things are taken care of, most financing companies will factor that in. Be ready to show your score before and after, along with a letter from GM if you can get it. If it's the first time anything like this has happened, it's likely they'll take that into account.

Good luck!

Max* · Nov 5, 2015

Kandiru said:
Sorry to hear, may want to contact both GM and FICO to settle this.

Settle what? His wife made an honest mistake. GM dinged her for it. That's how credit scores work.

Unless I misread, and she was late by a day, and they said it's 60 days. In which case, I would get in touch with GM and have them fix it. If they refuse, get in touch with the 3 reporting agencies (Equifax, Experian, and TransUnion). But nonetheless, it'll still be a ding.

Now, I've heard of CC companies who wont report on a first strike basis, but I don't know how true that is, or if it propagates to other credit related markets.

supersnoop · Nov 5, 2015

Thats not a simple "missed payment" if it's being reported as 60 days late. That's days since it was due. So, that's more like three missed payments.

And, you probably messed up by telling Alliant. You don't know which agency GM reported to, and you don't know which agency Alliant pulls from. There's a chance they wouldn't see it.

KettleOfHawks · Nov 5, 2015

My mistake as I checked again and it was marked as 30 days late, not 60. Also, just to make things interesting, I checked my wife's credit score and hers is just fine. It turns out when we got the GM car, we only put it in my name and not both of ours. She was busy that day and I just went and did it without thinking. Everything else is joint and that is the only difference between our two scores, so hopefully this all works out. I'll know in a couple of weeks.

CmdrThor · Nov 5, 2015

KettleOfHawks said:
My mistake as I checked again and it was marked as 30 days late, not 60. Also, just to make things interesting, I checked my wife's credit score and hers is just fine. It turns out when we got the GM car, we only put it in my name and not both of ours. She was busy that day and I just went and did it without thinking. Everything else is joint and that is the only difference between our two scores, so hopefully this all works out. I'll know in a couple of weeks.

Based on this, if you get her to cosign on the Tesla loan Alliant should take the higher of your two scores when determining your APR.

Max* · Nov 5, 2015

CmdrThor said:
Based on this, if you get her to cosign on the Tesla loan Alliant should take the higher of your two scores when determining your APR.

You sure about that? Things may have changed, but when my wife and I were signing for our first condo years ago, they took the LOWER of ours scores to determine the APR.

CmdrThor · Nov 5, 2015

Max* said:
You sure about that? Things may have changed, but when my wife and I were signing for our first condo years ago, they took the LOWER of ours scores to determine the APR.

I suppose it depends on the financing company. I used to work for one and we took the higher of the two. If it was always the lower then what benefit would it be to have someone with a higher score to cosign with you? The bank has both of you on the hook to repay and all they care about is having one person that is likely to repay.

Max* · Nov 5, 2015

CmdrThor said:
If it was always the lower then what benefit would it be to have someone with a higher score to cosign with you?

DTI reduction.

strider · Nov 5, 2015

Max* said:
You sure about that? Things may have changed, but when my wife and I were signing for our first condo years ago, they took the LOWER of ours scores to determine the APR.

Then can you just put her name on the loan?

Max* · Nov 5, 2015

strider said:
Then can you just put her name on the loan?

He could, if she has a low enough DTI and he trusts her to make payments on time

(not sure how it would work with Tesla, if the loan name has to match the title name which has to match the name on the account that you put a deposit with? No clue)

andrewket · Nov 5, 2015

Sounds like a dispute is in order if you were 1 day late and they reported 60.

Max* · Nov 5, 2015

andrewket said:
Sounds like a dispute is in order if you were 1 day late and they reported 60.

He later clarified, they reported 30. That may be the minimum (1-30 days late? 31-60 days late? 61-90 days late?)

rcarpen22 · Nov 5, 2015

supersnoop said:
Thats not a simple "missed payment" if it's being reported as 60 days late. That's days since it was due. So, that's more like three missed payments.

And, you probably messed up by telling Alliant. You don't know which agency GM reported to, and you don't know which agency Alliant pulls from. There's a chance they wouldn't see it.

Alliant uses Experian. So, it's possible your score didn't change for the purpose of the loan.

deonb · Nov 5, 2015

Max* said:
GM dinged her for it.

I came to the recent conclusion that GM just makes it up as they go along.

I got a loan through GM last month. I checked my credit score on all 3 agencies that day and it was over 750 but for some reason GM calculated it at 640 and wouldn't budge. So they offered me a horrible interest rate.

My credit union had the score right though, but the GMC dealer couldn't figure out how to deal with the credit union.

So I took the GM loan, and refinanced the loan with the credit union before even making the first payment. Meanwhile my credit score jumped to > 800 because of the new GM loan. Go figure. So GM completely basically screwed themselves out of servicing the loan.

I feel like their target customers are people who don't know any better

.

clarkbariowa · Nov 5, 2015

Alliant uses a weird credit bureau or scoring system. My score was 890. 2.49% for 72 months.

andyaycw · Nov 5, 2015

clarkbariowa said:
Alliant uses a weird credit bureau or scoring system. My score was 890. 2.49% for 72 months.

They might use an auto-enhanced FICO credit score. If I recall correctly, I believe that range is from 200-950 and places more emphasis on payment history of auto loans. My first auto loan through Chase used an auto-enhanced FICO according to the letter they sent me.

I got my financing for my 70D through Schools First FCU, and they used a traditional FICO with a range from 300-850.

This might also explain why some lenders pull a drastically different credit score than others. So, if you have a repo or something, your auto-enhanced FICO scoring model will ding you even more than a traditional FICO model.

supersnoop · Nov 6, 2015

Max* said:
He later clarified, they reported 30. That may be the minimum (1-30 days late? 31-60 days late? 61-90 days late?)

30 days late means exactly that; 30 days late. It's a threshold, not a range. If your payment was due on the 1st, the bank can start charging interest and fees on that day. But if you pay the bill on the 29th, there will be no ding to your credit. So, 30 days late basically means you missed two payments.

If the bank actually reported it as 30 days late when it was only 1 day late, then a dispute should clear it. But that doesn't normally happen.

Credit score ding right before financing :(

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