When I visited a dealership recently, the first thing the car salesman wanted me to do was fill out a credit application. This is before we discussed price or anything. Why did he insist that I fill out a credit application first?

In any game of strategy, the more you know about your opponent, the better. So in this case, the car salesman intended to use the info on your credit application to obtain copies of your personal credit reports in order to learn as much about you as he could. What kinds of info can he uncover about you from your credit reports? With just a glance he can learn:

  • Where you live and work
  • How long you've lived in your current residence
  • How long you've worked at your current job
  • Your credit history for the past seven to ten years
  • How much credit you now have available
  • Your debt-to-earnings ratio
  • If you are credit worthy to buy a car
Using this info, he can get an idea of what vehicles you qualify to buy and how much money you can really afford to spend. That's because he doesn't necessarily believe what you are telling him about your finances and personal situation anyway. Car salesmen have a motto: "Buyers are liars." He'd rather get the inside scoop on you from your credit reports, not from you.

Finally, if you feel it is inappropriate for the salesman to be asking you to fill out a credit application, then simply refuse. The only time you have to fill one out is when you are sitting at the desk actually buying your vehicle.

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