Don’t Automatically Permit Car Dealer To Run Your Credit Check

Extraneous credit checks could put an unnecessary dent in a credit score. That’s why, the premier resource for car shopping and automotive information, advises car buyers to know when they should and should not grant car dealers permission to run a credit check.

“Dealerships usually offer access to the best finance rates for qualified buyers, and to get those rates, a credit report is required,” says Sr. Consumer Advice Editor Philip Reed. “But if you are using outside financing from your bank or credit union, the dealer is not required to run your credit report.”

Car buyers can understand their rights and protect their credit scores by following a few helpful guidelines:

  • Shop around for a loan from an independent source such as a bank, credit union or online lender before going to the dealership so that you know the rate you qualify for before learning what a dealer can offer you.
  • At the car dealership, tell the salesperson you are a “cash buyer” (because you have pre-approved financing). But in the finance and insurance office, consider any offers that may beat the interest rate on the loan you already have.
  • Only give the car salesperson permission to run your credit if you decide to finance at that dealership. also reports that there is some confusion among dealers themselves about whether the Patriot Act requires them to run credit reports in connection with car sales.  It does not. The Office of Foreign Assets Control (OFAC) does require dealers to screen buyers who are making purchases of $10,000 or more in cash to make sure they are not on a government terrorism watch list. To comply, buyers must provide dealers with their name, address, date of birth, Social Security or other tax ID number, a valid driver’s license and occupation. But no credit-reporting agencies are involved. has more details on credit check do’s and don’ts at

Another advantage to securing outside financing is that buyers are less likely to fall prey to spot delivery and “yo-yo financing” scams. helps buyers identify and protect themselves against these situations at


About, Inc. is a car-shopping Web site committed to helping people find the car that meets their every need. Almost 18 million visitors use our research, shopping and buying tools every month to make an easy and informed decision on their next new or used car. Whether you’re at the dealership or on the go, we’re always by your side with our five-star  iPhone and iPad apps and our Android App. Our comprehensive car reviews, shopping tips, photos, videos and feature stories offer a friendly and authentic approach to the automotive world. We’re based in Santa Monica, Calif., but you can connect with us from anywhere by following @Edmunds on Twitter or by becoming a fan of on Facebook.

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2 Comments on "Don’t Automatically Permit Car Dealer To Run Your Credit Check"

  1. Good advice, and quite often saying that you’re a ‘cash buyer’ will give you better prices.

  2. Here’s a new trick that was foist upon me by the dealer:

    I was told that I could get financing for 1.9% “simple interest.” Before I signed on the dotted line, I checked out what that meant. Turns out that 1.9% “simple interest” had about the same credit costs as 3.9% APR. I declined financing with the dealer and went through my local credit union, keeping the money in my community.

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