Auto Dealer Red Flag Compliance Misconception

At American Credit Systems headquarters in Carlsbad, CA, we were speaking with a dealer principle and he wanted his dealership to only run a Red Flag check on one bureau, even if he pulled three. Further, that once he pulled the first credit report (Experian for example) and ran a Red Flag on it, he did not want to run a Red Flag check on the TransUnion nor Equifax. He was under the impression that in order to be compliant, all he had to do was run Red Flag check on one bureau. This thinking, however, is erroneous.


The reason this is so is because not all creditors report to all three bureaus. For example, a credit card company may report to Experian, but not TransUnion nor Equifax. This is part of the reason that scores vary from bureau to bureau. As a result, one person’s Experian credit report may produce a Red Flag, but the other two do not. For this reason, if you pull a bureau, you must run a Red Flag on it.




Compliance Solution


Our eCredit Complete runs a Red Flag check at the moment every bureau is pulled. The benefit of this solution is that not only will your dealership remain fully compliant, but it will speed up your deal flow allowing you to close deals quicker.  


For more information visit our website or call us at 760-579-6171.

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DBA American Credit Systems, 2020. The Punt Group, LLC

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