How do auto dealerships check your credit?

Auto dealerships collect financial information by asking potential customers to complete a car loan application. They use the information you provide, including your Social Security number, to get your credit report. With your consent, the agent’s finance department provides your information from the application to the credit bureau. When an agent pulls your credit report, it’s called “hard pull.” While a hard credit survey can lower your score, the impact is usually minimal.

How do auto dealerships check your credit?
How do auto dealerships check your credit?

Grant permissions

Car dealers only need permissioned purposes to check your credit. An example of a permitted purpose is to review your credit to confirm your identity before accepting a personal check. However, the agent needs your permission before running your credit report. You’ll need to provide your Social Security number before the agent can do a credit check. The salesperson will usually ask you to sign a credit application, which requires you to provide personally identifiable information and your signature consent for the credit check.

Why check credit

Auto dealers check your credit to learn more about your financial situation and to protect yourself from fraudulent shoppers. Your credit report helps verify you are who you are. The information dealershipson your credit report is also essential to obtain financing. When an agent takes your report and credit history, they’ll know better whether you’re a good risk taker on the loan and what terms will give you. If you have poor credit, you can expect a loan for the same car to have a higher interest rate than someone with good credit. If you tell a salesperson that you want to stick with a certain pay range, running credits can help determine which cars will fit your budget. For those with too low a credit score, financing may not even be an option.

Spouse Credit Report

Although a married couple may have a joint account, their credit scores remain separate. If you have joint accounts, you are equally responsible for the debts. Unless your spouse applies for a car loan as a co-borrower or co-borrower on the loan, the dealer will not need to check her credit. When you apply together for a car loan, the income of both is considered. If one spouse has better credit than the other, joint filing can result in higher interest rates than if the spouse with higher scores applied alone.

Grant Application Process

Some agents provide financial self-financing, while others contact external lenders. To get the best interest rate, be prepared to negotiate. You may want to check your credit report before having an agent get your credit report. Knowing what’s on your report and what lenders are looking for can give you a small bargaining leverage. Lenders and financial firms are looking for red flags that may indicate you are a financial risk taker. If you have a recent bankruptcy or foreclosure on your credit report, banks may be reluctant to lend you money. Recent fees and delinquent accounts also have a negative impact on your credit report. In some cases, an agent will approve your application even if you have poor credit, but charge a high interest rate to help offset the risk.


You can get free copies of your credit report annually from each major credit bureau by visiting

Credit score

The lender also looks at your credit score, which is a number assigned to you based on the information on your credit report. Factors that affect your credit score include your payment history, how long your account has existed, your credit usage rate, and your credit mix. Since there are three main credit bureaus — Experian, Equifax, and TransUnion — the information reported for each office can vary and result in three different scores. Lenders can get a GPA or just take it from one office.

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