Considering all the time we spend fretting about protecting our Social Security numbers, this may come as a shock: Your SSN isn't necessary for a car salesperson to surreptitiously peek at your credit report. He or she has the technological ability to unlock your file using only the information on your driver's license.
"An auto dealership checking a consumer's credit through TransUnion is not required to have the individual's social security number (SSN) in order to submit the request," says Steven Katz, a TU spokesman. Does the dealer need your permission to do that? "The dealer does not need ‘permission'; rather, it needs only certify a permissible purpose (such as extension of credit)," says Katz.
Equifax told us the same thing about the ability to get your credit report without your SSN, but stressed that anyone who pulls your file must get your permission to do so.
Experian did not respond to our query.
TransUnion prefers to get the SSN, because it more reliably helps locate your exact credit file, but it's not absolutely necessary. The credit report access keys on the license are your name, address, and date of birth, all of which are essentially public information. The driver's license number itself is not relevant, since the credit bureaus don't use that as an identifier.
Car dealers commonly ask for and photocopy your driver's license before they'll let you take one of their cars out for a test drive, says Charles Cyrill, a spokesman for the National Automobile Dealers Association. If you encounter this situation and are worried that your privacy may be compromised, explicitly tell the salesperson that you are not authorizing use of your license to pull your credit report.
Under the federal Fair Credit Reporting Act, a car dealer must always get your permission to look at your credit report. He or she can get that permission in writing—when you sign a release or a loan application—or by implication, without your signature, if there is a "legitimate business need."
What does that mean? According to the FTC, simply shopping around, checking deals, and even taking test drives does not constitute a legitimate business need by itself. Rather, it's only when you've gone further along into an obvious purchase transaction that your actions qualify as business that possibly involves a need to check your credit, according to a 1998 FTC staff opinion letter.
"Only in those circumstances where it is clear both to the consumer and to the dealer that the consumer is actually initiating the purchase or lease of a specific vehicle and, in addition, the dealer has a legitimate business need for consumer report information may the dealer obtain a report without written permission," says the FTC opinion. -Jeff Blyskal
For more on the ins and outs of buying new and used cars, check out the Cars section of Consumer Reports Online.
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