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Do Buy Here Pay Here Car Lots Report to the Credit Bureaus?

Traditional buy-here-pay-here (BHPH) dealerships do not report positive activity to the major credit bureaus. You can rest assured that they will report if they are forced to repossess a vehicle, though.

Why Don’t They?

Usually, BHPH dealerships do not report positive activity for two reasons. The first is that the major credit reporting agencies charge a fee for accepting reported information. The fee is nominal, but a BHPH is in the business of making as much money per transaction as possible in order to offset the accounts that go bad. This means most of them don’t dedicate the time, effort, or funds to reporting to the credit bureas. The second reason may sound a bit like a conspiracy, but it is quite logical:  reporting positive activity will improve a person’s credit score. If your score improves sufficiently, you will not need the services of a BHPH; therefore, the dealership would be setting itself up to lose customers by reporting positive accounts.

Alternatives to BHPH Financing

Many times, you do not need the services of a BHPH dealership. Even if you have bad credit and have been denied by traditional banks and credit unions, you can work with a dealer that arranges loans for people with credit problems. These dealers have relationships with subprime auto lenders who will not only fund your loan, but who will report your activity to the major agencies. In many cases, the interest on these loans is lower than what you will pay at any BHPH, and the lending terms are much better. Your payments will be due monthly, not weekly, and the down payments are typcially lower through a traditional dealer.  Eschewing a BHPH dealer in favor of a “bad credit car dealership” will save your money while giving you the opportunity to improve your credit score at the same time.

About the Author

The author has many years of experience in automotive finance and insurance. However, each consumer's situation is unique. It is best to contact a finance specialist for further assistance.
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