In theory you are correct, that is the new law, B U T in practice it is hard and sometimes impossible to track all the inquiries and know that the mulitiple pulls were for the same purpose.

The bureaus track by what company ordered the credit and, for the most part, they don't know and don't care what type of credit you are requesting.

Since the bureaus can be very difficult to deal with directly many/most companies use a third party to order their credit thru. This means that one company might pull credit reports for car dealer, mortgage companies, credit cards, ets. This means the credit bureaus don't know if those 5 pulls were from car dealers or if 5 different loans resulted from the pulls. It will be at least 3 months before they do know if you have 5 extra loans so they downgrade your creditworthiness (your credit score) until enough time has passed for the information to be reported to their system.

Why do companies use a credit broker rather than going direct? From my own personal experience I can tell you that $1,000 misteaks in your credit reporting bills are not uncommon. Multiply that times 3 (the number of credit bureaus) and then multiply that by 12 months in a year and you can see that most normal to small sized companies simply cannot deal with that.

They are the only game in town so they aren't exactly customer friendly. If they make a misteak they tell you that you must pay them anyway or else you can't continue to pull reports. Eventually you might get your money back, but don't hold your breath.

 

Thanks for the answer.

 

Wait wait wait, everytime you test drive a car, they pull your credit?! I test drive cars all the time! Are you sure about that? They just take your driver's license and make a copy. I thought they tried to get you to sit down and pull your credit so they could tell you what a great monthly payment plan you could have.

 

Yes, it is standard procedure at most stealerships.

It is against the law to pull your credit without your authorization, but it's kinda like speeding, if you don't get caught it doesn't count.

So tell them when you give them the driver's license that they are not authorized to pull your credit and that you know about the $10,000 fine if they do and that you will check your credit in the next few days to be sure they didn't pull it.

It gives them an edge in the negotiation is why they want to pull it.

Every salesman you give the spiel to will swear that maybe other dealers do it, but we're honest and we don't, but knowing and hearing from numerous Sales managers I know it is common if not a constant.

 

hmmm...I go test driving for fun so often. It seems like such a friendly atmosphere ender when you give spiel out "you are not authorized to pull my credit and that I know about the $10,000 fine if you do and that I will check my credit in the next few days to be sure you didn't pull it."

These test drives are usually on a weekend morning or afternoon, just enjoying some conversation with the dealers. Usually the younger ones approach me and really pour their heart out by telling me stories of their adventures in the car industry. Whenever they start talking about the car at hand, I steer away from the topic.

 

Well the next time you try to buy something on credit and your credit scores are too low to get the loan type you want or you have to pay a ridiculously high interest rate, just smile and thnk that it was worth it because I didn't mess up the atmosphere at the car dealers.

It won't affect the atmosphere to give them the spiel, it actually gives you a measure of control back.

 

nono, what you said was really really informative.

I definitely will take the advice.

 

Hmmm...not much to do there in Irvine/Davis, is there?

Warren

 

It is also recommended that if you go test driving, you should bring your own photocopies of your license. Hand it over to the dealership with writing on the bottom statinig the dealership is not allowed to enter any data from my license into a database for mail or credit checks.

You should also get that copy back once you are done with your test drive. They are not allowed to keep a copy of your license on file.

FYI.

 

I think extra credit cards hurt your bottom line because it's unsecured credit. So how it works out is that if you could otherwise qualify for a 100000 loan and you have 25k worth of credit card availability then you might only get a 75k loan because if you use your 25k credit and have a 100000k loan then you are paing on 125k and may not be able to make the payments and potentially default. That's my understanding of it.