“Soft” credit check for online car buyers

Pioneering online vehicle retailer Carvana has added a prequalification program to its car buying platform, which will allow consumers to seek a credit check for vehicles on the website without it negatively impacting their score.

By answering 10 questions, the company says shoppers on the site will be able to see personalized financing options in real time based on their own credit history, as well as exact payment terms for which they prequalify.

Prior to this launch, consumers would have to undergo a hard inquiry, which can lower credit scores by up to five points and remain on a person’s history for up to two years, the company said.

“Our main focus is on consumers, with the goal to bring transparency back into the antiquated car buying process,” said Ernie Garcia, Carvana chief executive and co-founder. “We believe consumers should have the ability to shop around and inquire about financing options to help them better understand life events without negative effects on their credit.”