With Approved Credit (WAC)

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With Approved Credit (WAC): What It Means and How It Works

A “With Approved Credit” (WAC) statement is a common qualifier in advertisements for financing. It signals that the promotional price or terms shown—such as low or deferred interest, minimal down payment, or special lease offers—are conditional on the buyer successfully obtaining credit approval from the lender.

How WAC Is Used

  • WAC typically appears in ads for big‑ticket items (cars, appliances, electronics) where the seller or an affiliated lender offers financing.
  • It functions as a disclaimer: the advertised terms apply only to applicants who meet the lender’s credit criteria (credit score, income, employment, collateral).
  • WAC protects advertisers from claims of misleading advertising or bait‑and‑switch practices by making clear that not every applicant will qualify for the promoted terms.

Why Advertisers Use WAC

  • To limit legal exposure and comply with consumer protection standards.
  • To set expectations: customers must meet underwriting requirements before receiving the advertised rate or payment plan.
  • To avoid accusations of offering terms to the public that are only available to a subset of applicants.

Legal and Consumer Protections

  • Lenders must follow fair‑lending laws. For example, the Equal Credit Opportunity Act (ECOA) prohibits consideration of protected personal characteristics (race, gender, age, religion, etc.) in credit decisions.
  • WAC does not override these protections; it simply states that approval is required and based on permissible underwriting factors (credit history, income, employment, collateral).

Example

Laura sees a TV ad promoting a new car with a low initial interest rate and a small down payment. A fine‑print WAC note clarifies that those terms are available only with approved credit. Because Laura has a poor credit score and limited collateral, she expects her application would likely be denied and therefore that she wouldn’t qualify for the advertised deal.

Tips for Consumers

  • Read the fine print: look for WAC and other qualifiers that affect eligibility and pricing.
  • Seek pre‑approval to learn which rates and terms you realistically qualify for before committing.
  • Ask for full disclosures of the applied interest rate, required down payment, fees, and the length of any promotional period.
  • Compare offers from multiple lenders and check total cost over the loan term, not just the promotional period.
  • If denied, request the reason for denial and review your credit report for errors you can correct.

Key Takeaways

  • WAC indicates advertised financing is conditional on lender approval.
  • It helps advertisers avoid misleading consumers but does not guarantee terms for every buyer.
  • Consumers should verify eligibility with pre‑approval, read disclosures, and compare total costs before agreeing to financed purchases.