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How To Avoid Becoming A Victim of Predatory Auto Lending

How To Avoid Becoming A Victim of Predatory Auto Lending

3 Ways To Protect Yourself From Predatory Auto Lending

Since the mortgage bubble burst in 2007, predatory lending for mortgages has been major news.

What we don’t know is that there are no laws passed to protect us from predatory auto lending.

It isn’t any news that auto dealers will shop around through different lenders to try to find us what we think is the best rate.

Did you know they also shop around to run your credit multiple times?

One of the latest predatory auto lending practices is to drop your credit score to bad credit by running your credit multiple times through multiple lenders.

The purpose for this is to prevent you from shopping somewhere else to get approved and to ensure that you will be paying a higher interest rate.

Sinister, evil and conniving!

There are 3 ways you can protect yourself from predatory auto lending so that you can avoid these predatory tactics.

  1. Know what your credit scores are before you shop for a car. The more you know about your own credit scores, the less harm these dealers can do to your credit. Don’t depend on them to tell you what your credit is.
  2. Find out what lenders are likely to approve you. You can do your own research and determine what auto lenders will be more likely to approve you based upon the qualifications they are looking for. This way, you can guide the sales person into the right position to finance you instead of relying solely on “what they will do for you.”
  3. Don’t choose bad credit dealerships. Avoiding dealerships that specialize in financing bad credit will cut out most dealerships who use predatory auto lending tactics. Many of these car dealerships have bad practices and you can avoid a potentially devastating situation by avoiding these dealerships altogether.

How does it make you feel to know that these tactics are being used?

I hope you enjoyed this article. If you have any questions about ways you can protect yourself from predatory auto lending, or have your own review of protections against predatory auto lending, leave a comment below.

If you are interested in starting the approval process off with raising your credit scores for free, I invite you to take my free, four-part, Dispute Letter Mastery Course.

In this course, you will learn how to update your personal information, dispute information that has errors, and delete negative information in order to raise your credit scores 50 – 75 points in only 45 – 60 days. A boost like this can really make a difference in your interest rates, and it is all free.

8 comments

  1. Hi Tamara – your creditmastery site is relatively new, but it’s obvious from the start that your knowledge on the subject is extensive. My only criticism is the lack of images. I realize that the content on this subject is the most important aspect, but even people hoping to gain some insight on this subject have emotions and nothing evokes emotions more than images. So I’d suggest you get some images of people applying for loans or dreaming of that new car or house that they need to finance. You have a good niche and it should do well once you have more content (with images) :-) on your website. Good luck…Jim Boult

    • Thank you Jim, I appreciate your compliments. I will definitely add more pictures to the site to ensure that you can emotionally relate to the articles. I appreciate your comment.

  2. Katerina Markakis

    Hello there!
    This was a very helpful and informative review and I cannot explain to you how glad I am to have found it. I am just about to buy a car and it is a rather stressful process so your tips really helped me.
    I will follow them and hope for the best! Thank you so much for sharing! Great work!

  3. Yes bad credit car dealers do run your credit which does hurt your score. They also have less reliable vehicles be cause they pick the cheapest cars at the auctions. They also charge 28% interest resulting in high payments. A better choice us buying a used vehicle straight out.

    • Thank you for commenting on this post. Yes, I agree, and these are all problems associated with buying from very small dealerships (50 cars or less). At the same time, because cars do not appreciate in value, I don’t find a problem with leasing a vehicle if your income can sustain investing and leasing a vehicle at the same time. Making smart investments is always better than just saving money because investing adds to your income while saving alone, with fees associated, will subtract from your savings. Leasing a vehicle allows you to drive a new or newer vehicle every two years while helping you to maintain excellent credit, and if you’re absolutely in love with the car, you can purchase it.

  4. Wow, I am so so glad I came across this post! I really never thought that dealerships would do this. You did not come out and say “dealerships”, but I am assuming they would do this too? I know all about the dings “shopping around” can add to your credit. So when I am shopping for something that requires a credit check, I tell them my credit is fine. I don’t let them do a check. I find what I want first, then finalize. Thanks for opening my eyes…did not know that this was happening when purchasing a car!

    • Tamara Rasheed

      Thank you for your comment! I am happy that this post will give you a way to protect your credit from unnecessary credit inquiries. And YES, dealerships do this. It is a surprising practice that should be illegal and creates great financial hardship for many people. I recommend that you pick up a copy of my new book, the Credit Mastery Handbook by Tamara Rasheed that is on sale for only 99 cents on Amazon. It will equip you with all of the tools you need to protect your credit, raise your credit scores and get approved without your credit scores taking dramatic drops and without the typical months it takes to recover.

      Good luck!

      Tamara

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