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Many dealers do not consider a personal check as cash, it's more a promissory note. Bank or teller checks should be considered cash. Many times the consumer has authorized the credit check in some papers they signed often disguised as "test drive authorization" form used to verify driving privilege's but is a hidden credit check authorization. Consumers need to start reading paperwork and crossing out what they don't want instead of blindly signing away their rights.
Now, this is not to be confused with the legitimate Patriot Act provisions for cash/check transactions over $10,000.
I always pay cash and they always run my credit. I was told it is because they want to be sure they have leverage if the check doesn't clear which makes sense.
No, it doesn't. "Running your credit" does not give them any authorization to charge against it. Credit bureaus don't extend credit or give loans. It gives them no leverage at all. Cash /= check.
They have no business running your credit without your authorization. If they ask for your SSN that's a good indication they intend to pull your credit.
Are there laws that regulate when credit may be checked? Several years ago, I bought a car from Carmax and paid cash for it. I paid a deposit on it and when I picked up the vehicle the next day, I gave them the check. I had to transfer money from savings to my checking account. The sales person told me he ran my credit because they are required to do so at Carmax. I didn't think much of it at the time, but kind of wondered if this was legit.
You can always place a "Credit FREEZE" on anytime. It's very easy. Stops any shenanigans, whether you know about it or not. (Protects you from some shady people too.)
Easy to "thaw" that freeze for a day or week, if you need it for legit purposes.
Some banks will "run" your credit, to open an account. Silly, but true. (California Coast is one of 'em.)
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by 00molavi
I always pay cash and they always run my credit. I was told it is because they want to be sure they have leverage if the check doesn't clear which makes sense.
The other way is for them to go to the bank with you where you either wire the money or get a cashier's check, but the dealer is not going to do that.
It drops your score 10 points, so not that big of a deal.
They cannot run your credit without your signature. I paid cash for a car once too, and while they wanted to run my credit, I refused. They didn't call the bank to verify the check because it was well after bank hours.
I gave them the check and drove it away at 9:30pm.
personal chex bounce fairly often so a credit check sounds wise.
bank check/money orders/cash are guaranteed so a credit check would be supercillious [sic].
personal chex bounce fairly often so a credit check sounds wise.
bank check/money orders/cash are guaranteed so a credit check would be supercillious [sic].
Ok, you're the second one to suggest credit check is in case the personal check bounces so tell us exactly how this works.
A credit check is with a credit bureau, which is a reporting agency only. Credit bureaus do not extend credit or make loans. Getting a credit report does not give you access to funds in any way.
You might check credit to determine if you want to accept a check but the check cannot bounce until after you accept and deposit it. So let's imagine two people bought cars from a dealer who has accepted their checks and they both bounce. The dealer has an excellent credit report for one of them and no credit report for the other. Tell us how the dealer's recourse is any different.
Ok, you're the second one to suggest credit check is in case the personal check bounces so tell us exactly how this works.
A credit check is with a credit bureau, which is a reporting agency only. Credit bureaus do not extend credit or make loans. Getting a credit report does not give you access to funds in any way.
You might check credit to determine if you want to accept a check but the check cannot bounce until after you accept and deposit it. So let's imagine two people bought cars from a dealer who has accepted their checks and they both bounce. The dealer has an excellent credit report for one of them and no credit report for the other. Tell us how the dealer's recourse is any different.
Quote:
Originally Posted by oceangaia
No, it doesn't. "Running your credit" does not give them any authorization to charge against it. Credit bureaus don't extend credit or give loans. It gives them no leverage at all. Cash /= check.
They have no business running your credit without your authorization. If they ask for your SSN that's a good indication they intend to pull your credit.
Look at it this way. Insurance companies check credit. They aren't lending you anything. If you file a fraudulent claim, they can't collect from Transunion.
Landlords check credit, despite having first month's and deposit at lease signing. If you skip on rent or trash the unit, they can't collect from Experian.
If you wish to work as a locksmith, or achieve a top secret security clearance, they will check your credit. The locksmith isn't borrowing anything, nor is the contractor with the security clearance. Why do you think that is?
You are correct, technically, that there is no leverage. However, when taking a personal check, which is basically just "I Pinky Swear," they certainly will check to make sure that other people you've made Pinky Promises to haven't been burnt.
There is also the OFAC requirement. Everyone buying a car from a dealer is checked against OFAC's SDN list. It isn't required to do that through a credit agency, nor does it require an SSN. HOWEVER, many/most dealers use deal tracker software systems that incorporate that through the credit bureau. You can push against them about it, they'll probably budge if you dig your heels in, but why? You just waste more of everyone's time.
You are correct, technically, that there is no leverage. However, when taking a personal check, which is basically just "I Pinky Swear," they certainly will check to make sure that other people you've made Pinky Promises to haven't been burnt.
Which was my only point, in response to one person saying specifically it was to give the dealer "leverage". As I said, they might run credit to judge your character before trusting your check but once they accept your check your credit is irrelevant.
They could also just hold on to the car until the check clears, which should be next day if e-check. I just sent my ex several thousand by zelle to cover kid's tuition and it said funds would be available to her in about ten minutes.
There are people who couldn't care less if their credit is checked and people who are adamant against it. Neither group has any business lecturing the other.
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