I can understand why credit card companies do this. They check my report periodically to see if I’m eligible for credit line increases, and also may raise interest rates if negative information appears. The auto loan is a fixed interest rate. I am current on my auto loan. Why would they care if I am current with my other creditors?
4 Comments Already
April 7th, 2010 @1:02 am
you may also want to get out your paperwork and read the fine print..some companies indicate if you are late with any open credit it can affect your interest rate with their company (even if they arent the company you are late with).
April 7th, 2010 @2:00 am
Companies are doing this more and more – if your credit history with other companies declines significantly, there is most likely a provision in your auto loan that allows them to “call” the loan (demand full payment immediately).
As long as your other payments are reasonably on time, you’ll be fine. Also, the auto loan company checking your report won’t hurt your credit because it will not go as an inquiry you requested.
April 7th, 2010 @2:12 am
In addition to what’s been mentioned, they do so for promotional reasons – to decide whether to send you “preapproved” credit offers.
They check your credit report to make sure you are current on your other obligations. If you are lacking in other departments, it can indicate to them that you will default on your payment to them.