General Credit Topics

[MetalguitarJames]

Call me crazy but it kind of burns me a bit when you have to waste a HP for cell phone service. Considering that it does nothing for your credit history (Unless we are talking negatively if you fail to pay) I wish it would be a SP instead. I'm staying with Straight Talk from now on. Forget wasting a hard pull for ridiculous rates anyways.

[mmmmmm]

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MetalguitarJames wrote:

Call me crazy but it kind of burns me a bit when you have to waste a HP for cell phone service. Considering that it does nothing for your credit history (Unless we are talking negatively if you fail to pay) I wish it would be a SP instead. I'm staying with Straight Talk from now on. Forget wasting a hard pull for ridiculous rates anyways.

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Your wireless service provider is essentially extending a line of credit to you, just not in the general sense that most people think about it.  Here's an example:

You open a new account with Verizon for 1 line of service on their lowest Share Everything plan, and purchase a Samsung Galaxy Nexus to put on the line.

1 GB Share Everything ($50 for the plan, $40 for smartphone) = $90

Samsung Galaxy Nexus (retails for $700) = $0 (free when you sign up for a new line of service)

That means, Verizon has literally invested $790 in you, because if you walk, that's how much they're going to lose.  They do a hard pull because it also determines whether you will require a security deposit or not.

You also have to realize most carriers do not have spending limits, which means you can also rack up additional charges that you may not pay, which is another liability to them.

It makes perfect sense by carriers do a HP, I fail to understand how others fail to understand.

[llecs]

Ditto to the above. I'll also add that I am a reseller for major carriers (no, I don't do biz with anyone here) and there's no hard pull. Try with a 3rd-party and it might or might not work.

[mmmmmm]

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llecs wrote:

Ditto to the above. I'll also add that I am a reseller for major carriers (no, I don't do biz with anyone here) and there's no hard pull. Try with a 3rd-party and it might or might not work.

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It shouldn't really matter too much on who is selling the phone.  Even authorized retailers still run the credit apps directly through the carrier.

[marty56]

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mmmmmm wrote:

It makes perfect sense by carriers do a HP, I fail to understand how others fail to understand.

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The issue isn't wether they can do a INQ on your CR but wether it should count against you like applying for a loan.

It's easy to understand why people would get upset about this if they were deined say a car loan because they just moved to a new area and had to get cable, power, new apartment , cell phone or it took their FICO score out of range for the interest rates they wanted. 

[mrwheezy117]

What's the difference in information from a hard and a soft inquiry?

I wonder why they just can't do the latter instead...? 

[mmmmmm]

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marty56 wrote:

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mmmmmm wrote:

It makes perfect sense by carriers do a HP, I fail to understand how others fail to understand.

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The issue isn't wether they can do a INQ on your CR but wether it should count against you like applying for a loan.

It's easy to understand why people would get upset about this if they were deined say a car loan because they just moved to a new area and had to get cable, power, new apartment , cell phone or it took their FICO score out of range for the interest rates they wanted. 

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As I already tried to explain, signing up for wireless service or utilities or anything else is applying for credit, simply not in the traditional sense of here's a credit line, go use it.

Almost all services today are postpaid, meaning you use their services first and you pay for it second.  It also means there is a chance you will default, not pay your bills, or simply move/disappear altogether.  Most cable or internet companies have routers, digital converters, etc., which all cost a lot more money than they're actually charging you because you're getting the subsadized versions, much like cell phones.

A cable company is extending a line of credit to you, however, it's only good for services through them.  Honestly, it's basically like a store card, just without the physical card.  I don't see people complaining when Macy's or Best Buy pulls their credit, and utilities or cell phone service is no different.

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mrwheezy117 wrote:

What's the difference in information from a hard and a soft inquiry?

I wonder why they just can't do the latter instead...? 

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People have argued this for a while, however, companies can get more information with a hard pull than they can with a soft pull usually.  The entire purpose of reporting inquiries as well is to show who is looking for credit/applied for credit, etc.  Signing up for cellular service is applying for credit, so to only do a soft pull is basically defeating the purpose of the system.

[linux007969]

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mmmmmm wrote:

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marty56 wrote:

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mmmmmm wrote:

It makes perfect sense by carriers do a HP, I fail to understand how others fail to understand.

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The issue isn't wether they can do a INQ on your CR but wether it should count against you like applying for a loan.

It's easy to understand why people would get upset about this if they were deined say a car loan because they just moved to a new area and had to get cable, power, new apartment , cell phone or it took their FICO score out of range for the interest rates they wanted. 

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As I already tried to explain, signing up for wireless service or utilities or anything else is applying for credit, simply not in the traditional sense of here's a credit line, go use it.

Almost all services today are postpaid, meaning you use their services first and you pay for it second.  It also means there is a chance you will default, not pay your bills, or simply move/disappear altogether.  Most cable or internet companies have routers, digital converters, etc., which all cost a lot more money than they're actually charging you because you're getting the subsadized versions, much like cell phones.

A cable company is extending a line of credit to you, however, it's only good for services through them.  Honestly, it's basically like a store card, just without the physical card.  I don't see people complaining when Macy's or Best Buy pulls their credit, and utilities or cell phone service is no different.

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mrwheezy117 wrote:

What's the difference in information from a hard and a soft inquiry?

I wonder why they just can't do the latter instead...? 

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People have argued this for a while, however, companies can get more information with a hard pull than they can with a soft pull usually.  The entire purpose of reporting inquiries as well is to show who is looking for credit/applied for credit, etc.  Signing up for cellular service is applying for credit, so to only do a soft pull is basically defeating the purpose of the system.

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The only problem is they do not report payment history so it does not help you. They only report if you default.

[mrwheezy117]

Verizon USED to report

[algorithmslave]

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linux007969 wrote:

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mmmmmm wrote:

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marty56 wrote:

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mmmmmm wrote:

It makes perfect sense by carriers do a HP, I fail to understand how others fail to understand.

---

The issue isn't wether they can do a INQ on your CR but wether it should count against you like applying for a loan.

It's easy to understand why people would get upset about this if they were deined say a car loan because they just moved to a new area and had to get cable, power, new apartment , cell phone or it took their FICO score out of range for the interest rates they wanted. 

---

As I already tried to explain, signing up for wireless service or utilities or anything else is applying for credit, simply not in the traditional sense of here's a credit line, go use it.

Almost all services today are postpaid, meaning you use their services first and you pay for it second.  It also means there is a chance you will default, not pay your bills, or simply move/disappear altogether.  Most cable or internet companies have routers, digital converters, etc., which all cost a lot more money than they're actually charging you because you're getting the subsadized versions, much like cell phones.

A cable company is extending a line of credit to you, however, it's only good for services through them.  Honestly, it's basically like a store card, just without the physical card.  I don't see people complaining when Macy's or Best Buy pulls their credit, and utilities or cell phone service is no different.

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mrwheezy117 wrote:

What's the difference in information from a hard and a soft inquiry?

I wonder why they just can't do the latter instead...? 

---

People have argued this for a while, however, companies can get more information with a hard pull than they can with a soft pull usually.  The entire purpose of reporting inquiries as well is to show who is looking for credit/applied for credit, etc.  Signing up for cellular service is applying for credit, so to only do a soft pull is basically defeating the purpose of the system.

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The only problem is they do not report payment history so it does not help you. They only report if you default.

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Well said!! These type of "lenders" ie...wireless services, power companies, and the like are a double edge sword. These companies have all the benefits with none of the responsibility of having to report the good.   In my OPINION, this should be a soft pull. At least, these type of inquiries should be less points off vs the traditional method.