If a credit applicant has a short credit history and isn't extremely young, an auto dealership finance manager should be on guard, according to Sgt. Darren Schlosser of the Houston Police Department's Vehicle Fraud Unit. The customer could be using a synthetic identity, a completely fake persona.
Most people begin building their credit history at age 18, Schlosser said. "If you have a 30-year-old person that has six months of credit history, that ought to be a huge red flag," he said.
Legitimate reasons do exist for a credit history to be thinner than a person's age would suggest, including incarceration or or being new to the country, according to Schlosser.
Asking someone if they've lived abroad is easy. Asking someone if they've been in prison is more difficult. Schlosser said a dealership could take an open-ended approach instead of broaching the subject of prison directly. Mention you noticed the short credit history; ask the customer if there was a reason for it, he said.