How to Use Your Credit Report as a Negotiating Tool

This only applies to people with perfect credit. In the car biz your credit is graded as A paper (credit score above 700), B paper (699-675), C paper (674-649) and D paper (below 600).

The dealership has a portfolio of all the loans that they extend. Some have a portfolio of a lot of A paper loans. Those dealers can use the fact that they send a lot of A paper to a certain bank and say to that bank, "Hey, I send you all this A paper. Look the other way and give me an approval on this D paper guy."

So, let the dealer know that you know that if your credit file is added to their portfolio it will help the dealer get a person with less than perfect credit a loan. You can use this as a negotiating tool to get the dealer to give you tier one financing at their buy rate. If you have awesome credit, the dealer wants to get you the loan. They want to have as much A paper in their portfolios as possible.

To learn your credit score, visit MyFICO.com.