In the car industry we can be mystified when we see good finance applications are rejected. People just move on to the next deal and don’t give it much thought while they could make the deal work .
If a finance manager can understand why certain deals get rejected at first, it can help dealers find some hidden opportunities for rejected applications.
Automatic rejections from a lender are often accepted as: “Consumer does not fit the lender criteria.”, without more information. Sending the application from one lender to another until the finance manager closes the file, only hurts the applicant’s credit.
Lenders see a different credit bureau than the finance managers and have their own internal scoring system. A finance manager will rarely know the actual internal score of a customer with that lender.
Lenders might decline a file that is not structured based on that lender’s specific criteria. The decision made by the lender is 90 percent based on the data that the finance manager puts in their system. It is very important for dealers to have a deep understanding of credit in order to figure out if their clients will be declined or approved prior to submitting.
Dealers have to be aware that when you send a finance application, approximately 2 out of every 3 deals are decided automatically regardless of an approval or decline. These transactions may never be seen by a person.
For example, there was an applicant who applied for a car loan while under bankruptcy. On the credit bureau you could see a vehicle repossession happened nine months after the bankruptcy, but in fact it was included in the bankruptcy. The lender’s system was triggered to decline the application, however it was only bad timing and not another issue on the credit file.
Ontario Underwriters are confident that we can provide your customers the best finance option for their situation. Our licensed financial agents will consider each lender’s financing requirements when working on each deal. We know how to navigate your finance deals and help you to make the most out of each deal.