A "note" about dealerships running your credit.

[undrtkr65]

I did have excellent credit at the time and had a consigner since my file was thin. They didn't pull mine or my co signers credit only bb&t did which was the bank we financed it through. I guess they already knew he had excellent credit since he's bought cars there before.

[Gunnar419]

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@Anonymous wrote:

Actually the law states that identification can be established by running credit, but that isn't the only way.  If you have financing already arranged and/or are paying cash, they are NOT required to pull your credit under the Patriot Act and in fact, it is totally unecessary.

http://www.edmunds.com/car-buying/car-dealership-credit-report-scams-and-the-patriot-act.html

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I know this is an old thread, but I'm glad it got resurrected so Franticone (and Edmunds) could correct the inaccurate impression established on page 1 by usmc. Despite usmc's adamant tone and host of links, the Patriot Act is used more often by car dealers to scam naive customers into submitting to unneeded credit checks than it is to fulfill any lawful government purpose. Thank you, Franticone.

[Anonymous]

I applied at a dealership and now Im getting letters in the mail nealrbevery week. I think so far I have gotten 6 or 7 and its been at least two months now since I applied. How can I ensure they dont keep running my credit? The sales woman said it wouldnt bring my score down but I think she is wrong. Any advice would be appreciated. 

[Stevielynx]

Freeze your credit so they can't keep running it.

[Anonymous]

I sold cars for over four years.  

1. Yes, your credit WILL be run. And there is really no two ways around it.  

2.  From a real world and practical standpoint, the dealership is a business and their time is money too.  When someone comes into the dealership seeking an auto loan: that dealership is trying to find out a few things: A) does the customer have the MEANS 2) and CREDIT to pursue this transaction.  

As mentioned, in the auto industry there is a saying, "Buyers are Liars"  point and simple!  The cardinal rule of auto selling from the standpoint of the dealership and salesman is,"do not waste your time with someone who cannot purchase an automobile."  You would not believe how many individuals I've seen making declarations of how qualified they were to purchase this $45,000 vehicle to only find out that had repossesions, charge offs, collections and leans.  

Now, imagine, what things would look like if customers "demanded that the dealership" not pull their credit and send the deal package to the financing institution blind?  Remember, the dealership has a relationship with the institution, not to mention the fact that said institution(s) would tell the dealership to "flip off" for not doing their diligence.  

Pulled credit is a neccessary evil.  It's going to happen one way or another.  As for insuring that you do not get taken for the spread?  There are other posts and contributors that have answered that question.  Just remember, great credit and overall knowledge goes a long way. 

[striders]

I know this is an old thread, but it seems things has changed in regards to HOW MANY TIMES your credit will get pulled and how it affect your credit score. What is BIZARRE is that even when the manufacturer has approved the loan (Mercedes, BMW, Honda, Toyota, etc.), the dealer STILL pull your credit TWICE.

In my case, I got THREE inquiries when I bought a car:

1. I applied directly to with the manufacturer (Mercedes Finance - MF) online, credit pulled, approved on the spot. MF issued a letter to bring to the dealership
2. At the dealership, they REQUIRE that I fill out another credit appliaction form for "identity check"
3. Dealership run TWO credit checks

• 1 for the dealer
• 1 MORE for Mercedes Finance (MF) -- ???

So I have 3 inquiries:

- 1 for the dealer

- 2 for MF

Why did the dealer need to run ANOTHER credit with the manufacturer, even though I got approved?! This also happened with my SO (Audi dealer), who also was approved by Audi Finance directly when applying online. Bizarre IMHO..

I filed a complaint with Mercedes (not dealership) and received a call back from Mercedes. They said the dealer SHOULD NOT run another credit against MF, since I was already approved.

As for multiple inquiry count as one, I don't know if this is true or not. ALL my credit monitoring service (provided by banks, credit monitoring subscription, etc.) will always show "recommendation" that I don't apply too many credits. Well, the recomendation was there because of the 3 inquiries I got from the above.

[Anonymous]

You were submitted by the dealership back to mercedes becasue Mercedes is not a "direct lender", meaning they do not offer loans to the public directly like a local credit union or bank. They can tell you that you are approved and they can even tell you that you qaulify for "X" interest rate or term but they will not be loaning you the money directly, they require an intermediary, in this case the dealership. 

[Anonymous]

Also, can I please clear up a HUGE reason why a dealership pulls your credit before submitting to a lender?

Maybe not you, and its almost scary to post this on the internet but people are stupid, I mean like legit stupid. Let me explain....

Customer fills out a credit app with a dealership employee, personal info, rent/mortgage info, job info, income etc... Here is how this goes

Employee: What type of work do you do?

Customer: We are retired

Employee: Great, what is your monthly gross income before taxes?

Customer: She gets $1300 a month and I get $1600.

Employee: Oh ok, that seems a tad low for you to be buying a $50,000 SUV.

Customer: Don't worry about it junior we have 800 credit scores and $10,000 down, we can buy whatever we want! Just pull our credit and you will see our greatness!!

Employee: Yes sir....

Employee runs a credit report, comes back to the customer and the conversation goes something like this.....

Employee: Folks, I'm a tad confused and I was hoping you could explain something

Customer: Oh here it comes, THE BIG SCAM!!

Employee: We have reviewed your credit file and you have the following debt:

$2400 Month Mortgage

$750 Month BMW lease

$1250 Month RV loan

$1000 Month unsecured loan

Employee: So I was a bit perplexed just like any lender would be as to how two folks such as your self could be affording all of these nice luxuries, have perfect credit for many years and had to have proven exborent amounts of income to qualify for a $400,000 mortgage on a whole $2900 a month?

Cutomer: Oh yea about that, we actually draw $15,000 a month out of retirement account that has a balance of $5.6 million. We just didnt want you telling the government about all of our business.

Employee: ::Faceplam:

The point in my long winded skit here is that if a dealership did not pull the customers credit and analyze the customer DTI and PTI and ask proper follow up questions afterwards to present the entirely TRUE story to the lender, do you have any clue what would happen?

You would be the moron dealership who managed to get an 800 beacon multi-millionare turned down for financing!!

Bottom line is this, if you have bulit up in your head some crazy reason why a dealer and a lender dont have a need to run your credit just keep your crazy butt of dealerships and pay cash for cars on the side of the road. It would be much less frustrating for all parties involved. ::lol::

[Anonymous]

A few inquires does not ruin your credit, it will cost you a few points for a month or two but it isnt a big deal.  Having said that I always bring my own financing to the dealership and I don't allow them to try and beat it.  I finance with NFCU or Penfed which have great rates and I value my relationship with them so even if it costs me half a point I will go with them.  I suppose the only exception would be a .9% deal through a captive lender but I haven't had that situation yet.

I recently bought a new BMW with cash and had to provide my SSN for them, they did some type of identify verification as required by the Patriot Act but did not run credit.