Some car dealers check your credit report when you test drive a car!

According to the FTC it is illegal for anyone to run a credit check without your written permission. Usually, when you test drive a car the dealership will ask if they can make a copy of your license for insurance purposes. Some dealerships also use this as an opportunity to run your credit report. They use your credit report to size you up as a buying prospect. Some will even try to pre-qualify you for loans. The dealership won't tell you they're doing this. This practice can hurt you in several ways. Firstly, unauthorized credit checks are an invasion of your privacy and they give the dealership an unfair advantage in negotiating the terms of your car purchase. Secondly, unauthorized credit checks can lower your credit rating, which could prevent you from qualifying for the best financing rates. If your credit report is run multiple times within a short period of time, and no credit is issued, this can lower your credit rating. The most abusive dealerships will try to pre-qualify you for a loan with multiple lenders, but not give the needed credit information to the lenders, forcing each individual lender to perform their own credit check.

How to Protect Yourself.

When you test drive your car look carefully over any paper work that they ask you to sign. Make sure there isn't any fine print that authorizes them to run your credit report . Tell the sales person at the dealership straight out, when you give them your license, that you do not authorize them to run a credit check. If after you leave the dealership you are concerned that they ran your credit report you can go here and get a free credit report. Check if the dealership ran your credit report. Note: you can run your own credit report as many times as you like and it does not negatively affect your credit rating. If the dealership ran a credit check without your permission don't deal with that dealership again.

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