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The dealership will also obtain a copy of your credit report, which contains information about your past and current credit obligations, including payment history, balances, credit limits and interest, any relevant data from public records, and your payment history. Each account’s status will also be included on your credit report, including any overdue amounts and if the account is open or closed. If a creditor has taken any legal steps to collect on a debt, this information will also be included.
Most dealerships will submit your application to multiple possible lenders, including finance companies, banks and credit unions, to find an assignee who’s willing to finance your purchase. Your credit application will be evaluated using various techniques to determine whether you will be approved for a loan.
When you finance through a dealer, you will not deal directly with prospective lenders. The decision to offer you financing will be based on an evaluation of your credit score, credit report, your completed application and terms of the sale, including your down payment amount. If a lender agrees to finance your purchase, it will notify the dealership and give a buy rate, which is the interest rate the lender is willing to offer. The dealer then comes to you with an interest rate, which may or may not be higher than the buy rate. This is where you want to start negotiating that interest rate to push the rate you are paying closer to the buy rate the dealership received.