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How Renting a Car Can Affect Your Credit

Did you know a rental car company can pull your credit report if you attempt to secure a rental car with a debit card? Apparently, rental car companies have found a correlation between debit card use and increased risk of loss. The credit check allows customers the convenience of using debit cards while minimizing the company’s risk. The problem: some of the rental car companies perform a risk-assessment designed for the car financing industry. So the inquiry on your credit report makes it look as if you’re applying for a car loan, not spending $50 on a one-day car rental. This shouldn’t have an impact on those consumers with pristine credit, buy may hurt consumers with little established credit, or maxed out credit cards.

Companies don’t need your permission to run a credit check. In fact, a company can run a credit check as long as they have a business need to investigate a transaction initiated by the consumer. In this case, the request to rent a car. Furthermore, the rental car companies may not disclose their policies if you present a debit card at the counter.

The moral of the story: use a credit card when renting a car, not a debit card.

Nancy

Wednesday 7th of February 2007

Great information. It's a shame that companies really can check your credit like that without permission -- it explains why we've gotten the occasional letters from credit bureaus about "too many credit inquiries." We often scratched our heads over that because we hadn't gotten any sort of loan or new credit card. Now I know! Thanks!