Car Shopping and Your Credit - What You Don't Know Can Hurt You!!

Car or truck shopping can be fun as long as you know what to do before you go. And going without a plan is NOT a good idea. There are a few steps to take to insure you have the most positive experience possible and drive away in the vehicle of your choice or your dreams.

First, do not go shopping for any vehicle until you have been to see your bank loan officer or your credit union lender. Find out exactly what your purchase power and financing options are BEFORE you go on any dealership lot anywhere. If there are credit issues that need to be dealt with, this is the time to find out by going to annualcreditreport.com to get a free copy of your credit report. The lender will not be able to give you a copy of what he's looking at because that would put them in a credit reporting position. If you get a copy of your own credit report, they can and should be willing to go over it with you if you need help.

Second, DO NOT give the finance person at the dealership your personal information. Why? Because after you have signed on the dotted line and are directed by a sales person to the lot to kick tires, look under the hood and do the usual car shopping things, they are busy inside sending your application to at least six different lenders. If your credit isn't so good, they will then go to the more hardcore lenders that charge a much higher interest rate. And they won't give you a copy of your credit report so you can see why you are either being denied or charged a higher interest rate. Once again, to give you a copy of the credit report would put them in a credit reporting position and this would be against their company policy and against the policy of the credit reporting agency they use.

David recently went shopping for a car for his son. He knew everything I've just written about but didn't do his homework before going shopping. To his chagrin, the dealership sent his application to at least six lenders before telling him what their requirements would be. Needless to say, he was put out with himself and with the dealership. Because, every time his credit was requested by a different lender, it created another inquiry on his credit report and brought his credit score down by at least 3 to 6 points per request.

But then let's say you decide that particular dealership doesn't have what you want and you go to your second choice to look around. Same scenario. Finance person gets your information and goes to work while you go kick tires, look under the hood and do the car shopping thing. And once again, your information is sent to at least six banks and or credit unions. Can you just see the inquiries mounting up?? And the inquiries will stay on the credit report for at least two years. And when lenders look at your credit report and see all those inquiries , ,

So, you can see how a day of car shopping could create quite a bit of havoc with credit scores and then because YOU, the consumer, decide not to buy, you have no new credit to show for all the credit inquiries. Truly, what you don't know can hurt YOU!!!

Barbara Tubbs Hill has been in the credit and mortgage business for over twenty years. The people in this article are real. Some are family members and others have been customers. For more information and the Credit Tip of the Week, go to [http://www.askbarb313.com]