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A couple of days ago, I went to a Chrysler dealer here in Florida to look for a new car.

Being that my credit score is currently somewhat low (about 680), me and my wife thought that we could have her as a co-applicant, as her score is over 800. Among the reasons for her score is that I paid off her debts (what was left of her school loans, etc) some years back.

Also I have been the only one with an income in our household for last 15 years, so for most of our marriage any debts have been in my name. She has a credit card (opened in 1999) that she has not used for years and she is also a secondary card holder on an American Express card and a MasterCard that are both in my name (she has not used the cards as we try to keep them only for emergencies).

The information about her credit score comes from Chase Bank (who is the provider of the credit card she opened in 1999).

Anyway, back to the situation at the dealership. The salesperson walked to the finance department with our information, but eventually came back telling us that the finance department cannot see any information for my wife.

He asked if my wife has some kind of credit protection on her social security number and my wife said that she has not signed up for anything like that.

I asked the salesperson what credit reporting agency they are using and he said it's Equifax (also he said that the U.S. east coast uses Equifax, while Midwest and west coast uses something else).

We weren't really sure what to think about this so we told the salesperson we have to look into it and get back to him. On our way home my wife found a site that talks about a scam like this that car dealers supposedly use to push the car loan at a higher rate.

We faxed a request for information to Equifax but it can supposedly take 48 hours to receive a reply, so I wanted to ask about this here.

Is there a scam that goes something like this or is there some other cause for not being able to see someones credit details? What can a buyer do to mitigate this kind of situation?

  • 3
    Also I have been the only one with an income in our household for last 15 years, so for most of our marriage any debts have been in my name. Most? Or all? Has she had anything (mortgage, car, credit card) that would show up on her credit history with her name on it in the last 15 years? – yoozer8 Jul 20 '17 at 16:17
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    If she's not co-signed on any of the family credit accounts, and has no income history, or credit history for 15 years, then her report is blank for the past few years and they would not be able to do anything. Personally, I'm a proponent of paying cash for basic transportation. If you wish to pay the price to finance, there are several Q&A's here that talk about the best way to do it. Most of them recommend preapproval with a local credit union, then let the dealership beat it if they can, or use it if they can't. Watch out for four-square technique. – Xalorous Jul 20 '17 at 16:20
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    Why do you think your wife's score is over 800? Where did you get that information? – quid Jul 20 '17 at 18:36
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    I mean, who told you her credit score was 800, when did that happen, and were you shown an actual FICO score or some proprietary one? Because if it was in 1999 it's not terribly relevant... – quid Jul 20 '17 at 19:27
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    I not only support the suggestions to pay cash, I recommend getting to a cash-only basis as soon as possible. To the objection that this hurts your credit score, I say, Who cares if you don't need credit? My credit reports have been locked for five or six years and it hasn't hurt me. The only inconvenience is that most US banks have a STUPID requirement to do a credit check before they let you DEPOSIT money. But since I already had two banks before I froze the records, that's no big deal. – WGroleau Jul 20 '17 at 22:06
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Its not a scam. The car dealership does not care how you pay for the car, just that you pay. If you come to them for a loan they will try and service you. If you come with cash, they will sell you a car. If you come with a check from another bank, they will accept it.

I would try to work with Equifax or a local credit union to figure out what is going on. Somehow she probably had her credit frozen.

Here are some really good things to mitigate this situation:

  1. Buy a car for cash, with your credit you are going to get hosed on an interest rate. Scrape together whatever cash you have and pay cash for a car.
  2. Obtain financing on your own from a bank or credit union.

Oh and make sure you do #1 and forget about financing cars ever again. I mean if you want to build wealth.

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    "If you come with cash, they will sell you a car and not try to talk you into financing" Many people have had experiences that disagree with this. Certain dealerships make large amounts of their money from financing commissions, and it makes total sense that those dealerships would push financing. – mbrig Jul 20 '17 at 19:13
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    I speak from experience, but perhaps it is not true for all dealerships. – Pete B. Jul 20 '17 at 19:15
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    So do I, so I don't see your point. (Some) Dealerships pushing financing is will documented on the internet. – mbrig Jul 20 '17 at 19:16
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    @mbrig, There is no way it is at all common for a car salesman to add friction to a transaction to talk a buyer out of paying cash in an attempt to score the financing. Now, I'm sure there's a discussion. "How will you be paying?" $100 bills. "You know we have really great financing available, how about I run your credit?" or whatever, but I can't believe it's common practice for a car salesman, who has quotas to meet, to try very hard being difficult with a cash buyer. "Many people" complaining about aggressive dealer financing on the internet does not take away from the tone of this answer. – quid Jul 20 '17 at 19:57
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    @pojo-guy Who do you think sets the salemen's monthly targets, and decides the size of the commission? The dealership, or somebody else? Of course salemen "make money" from selling financing, if they have been told to sell it! – alephzero Jul 20 '17 at 22:08
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By law, your wife can get her full Equifax credit report (sans-FICO score) instantly (once every 12 months) via https://www.annualcreditreport.com

She can even get her FICO score with a 7-day free trial of Equifax Complete Premier.

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    Also, @neo, if you're refused credit, they have to send you a refusal letter. This entitles you to a free copy of the report from the company used to evaluate you when you were refused. This way you can save the free report for whenever. – Xalorous Jul 20 '17 at 16:23
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    Not really instantly, @YosefWeiner - you spend at least ten minutes navigating around and declining all the costly add-ons they try to sell you. But yes, great point. – Aganju Jul 20 '17 at 17:42
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    One every 12 months? In the UK you get a free report every month. I wonder what the difference is? – Kallum Tanton Jul 21 '17 at 9:40
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    @KallumTanton probably because they are different countries – Yosef Weiner Jul 21 '17 at 10:23
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    you didn't address if it was a scam or not. This is a very incomplete answer. – Mindwin Jul 21 '17 at 14:42
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I actually had a similar situation when I tried to buy my house. I paid off all my loans and was proud of my "debt free" status. I had no car note, no student loans... absolutely no debt, but I did have a bank-issued credit card. (USAA, not Chase, but I assume the same may apply).

When I tried to get a home loan they told me I had "absolutely no information on my credit report." AKA I had no credit. The mortgage lender had no idea what was going on, nor did I or anybody else. It took a lot of research before I realized that the credit bureaus use a formula for the credit rating that involves a lot of things, but if you haven't had a current line of credit reported to the agency in over a year (maybe it was longer, I didn't have anything for 3 years) you aren't going to have a credit score.

Because I was "debt free" I was also credit report free and eventually the credit bureaus had nothing to go on, and my score disappeared. The bank-issued credit card was on my credit report, but they didn't report monthly balances so the bureaus couldn't use it to determine if I was paying off the card or if I even had a balance on it. It was essentially not doing my credit any favors, despite what I had thought.

In short, based on the fact that you have no debt in her name, and you have taken on all debt in your own name, its very plausible that she has no credit rating anymore. It won't take long to get it back. Once you have ANYTHING on your credit that's actually reported the formula can kick back in and look at credit history as well as current credit and she'll be fine.

  • So she should use her credit card to buy something? If she pays it off immediately will that still work, or does she need to let it accrue interest for a month first? – 1006a Jul 20 '17 at 21:40
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    @1006a: It can be paid off within the grace period (before any interest is charged), but after the statement date (so the balance on the statement is not zero). It would be an absolutely terrible card to not have a grace period for new purchases. – Ben Voigt Jul 21 '17 at 2:00
  • @1006a See here: money.stackexchange.com/q/13843/26773 Don't pay interest for the sole purpose of building credit. – Travis Christian Jul 21 '17 at 16:06
  • @1006a Keep in mind, that not every credit card (bank issued ones as I mentioned here) are sometimes not reported to the agencies beyond the fact that it exists, and so no amount of purchases will affect your credit score. I had my card for nearly 10 years and never realized that it wasn't counting toward my credit. When I checked my credit report it showed the card, but never showed a balance, this is how you would know. – leigero Jul 21 '17 at 17:03
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You say

Also I have been the only one with an income in our household for last 15 years, so for most of our marriage any debts have been in my name. She has a credit card (opened in 1999) that she has not used for years and she is also a secondary card holder on an American Express card and a MasterCard that are both in my name (she has not used the cards as we try to keep them only for emergencies).

This would seem to indicate that the dealer is correct. Your wife has no credit history.

You say that you paid off her student loans some years back. If "some years" was more than seven, then they have dropped off her credit report. If that's the most recent credit activity, then she effectively has none.

Even if you get past that, note that she also doesn't have any income, which makes her a lousy co-signer. There's no real circumstance where you couldn't pay for the car but she could based on the historical data. She would have to get a job first. Since they had no information on her whatsoever, they probably didn't even get to that.

protected by Community Jul 21 '17 at 1:46

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