What is 'With Approved Credit (WAC)'

ith approved credit is a type of advertising qualifier which indicates a particular financing offer is contingent on the buyer having adequate credit. Measurement of credit is through the credit rating, the income, and employment factors. This statement often appears in the small print in car ads touting a lease or loan plan with a specific down payment and monthly payment. As the fine print explains, the offer is only available for buyers with a good credit rating.

BREAKING DOWN 'With Approved Credit (WAC)'

With approved credit is a legal qualifier which protects a merchant from accusations of bait-and-switch policies. Bait-and-switch is the practice of offering one product or service to attract customers which is not available. Bait-and-switch tactics are considered fraudulent and a violation of consumer laws. Since loan and lease offers are generally contingent on the buyer’s credit rating, many potential buyers will likely not qualify for the advertised terms. By making the offer contingent on approved credit, the merchant cannot be accused of fraud, assuming the advertised offer is genuinely available for credit-worthy buyers.

The term with approved credit is also a practice used in promotional materials for home loans, credit cards, and store credit. To determine if a customer meets the merchant’s standards to qualify for the advertised loan or lease rate, the merchant will run a credit check on the potential buyer. Other factors investigated include the annual income and work status. Customers with the best credit ratings will get the most beneficial financing options.

Consumer Protections on With Approved Credit Offers

One problem for consumers is that there is no single standard for determining what constitutes approved credit. Merchants are free to establish any level of credit-worthiness they desire, although most will balance risk mitigation with a desire to make the sale. However, to avoid charges of discrimination, the merchant must be consistent in basing decisions on financial factors.

Even though the term with approved credit is somewhat vague, buyers are protected by specific consumer law. Americans have a right under the Equal Credit Opportunity Act (ECOA) to know why their credit application was not approved. The answer to a customer's question cannot be vague and must be more than stating the applicant did not meet the standards but must specify a reason. Examples of reasons to deny include, low credit ratings, income not meeting defined criteria, and no length of work history.  Factors that cannot be considered include race, gender, and age. Also, the receipt of public assistance should be part of regular income for recipients. 

  1. Trade Credit

    A trade credit is an agreement in which a customer can purchase ...
  2. Credit Analyst

    A credit analyst is a financial professional who possesses expertise ...
  3. Credit Mix

    The different categories of debt within a consumer's credit history ...
  4. Credit Limit

    Credit limit is the amount of credit that a financial institution ...
  5. Credit Reporting Agency

    A credit reporting agency is a business that maintains historical ...
  6. Bank Credit

    Bank credit is the amount of credit available to a company or ...
Related Articles
  1. Personal Finance

    Lines of Credit: The Basics

    Learn how lines of credit, hybrids of credit cards, and normal loans, can help or hurt your finances. Determine what is right for you.
  2. Personal Finance

    Build Your Credit Score

    Here are four good ways to build your credit score when you're starting from scratch. Do it right and you'll end up with excellent credit.
  3. Personal Finance

    Is Your Credit Score at 850? It Can Be!

    Use these tips to increase your credit score and your ability to get low interest rates on loans.
  4. Personal Finance

    Why You Should Improve Your Credit and How to Do It

    With credit playing a big role in many financial decisions, it is important to maintain good credit.
  5. Personal Finance

    Best Credit Cards For People With Poor Credit Scores

    There are still ways you can build credit with a credit card, even if you have bad credit.
  6. Personal Finance

    Breaking Down Credit Card Fine Print

    Those "perks" offered by credit card companies usually come with strings attached, and these are just a few of them.
  7. Managing Wealth

    5 Common Misconceptions About Your Credit Report

    Your credit report is one of the most important factors in determining your ability to get loans and new credit and has a major influence on your rates.
  8. Personal Finance

    How to Read Your Consumer Credit Report

    Learning how to read your consumer credit report is vital, as it includes important information about your credit history.
  9. Personal Finance

    6 Benefits of Increasing Your Credit Limit

    If you can resist the urge to overspend, then raising your credit limit could benefit you in various ways.
  1. What are the Benefits of Credit Ratings?

    Learn how credit ratings are an important tool for borrowers. Typically, the better your credit rating, the better the loan ... Read Answer >>
Trading Center