When a bank checks a new customer's credit

[too-much-time]

When a bank checks a new customer's credit, whether the pull is soft or hard, I take it this procedure is standard for being new and getting a checking account. But certainly the official reason for doing it isn't that the bank can fill the gaps in your credit report with immediate offers. Or is it?

[takeshi74]

Can you clarify the question?  Not sure what you mean by "filling in gaps with immediate offers".  The two seem entirely unrelated.

[too-much-time]

By "gap" I mean the difference between what the customer credit report shows and what the bank can offer. The customer might have a mortgage loan at 5%, whereas the bank can offer a refinance at 4%. Or the bank might point to equity in your house and suggest a loan. Or they might promote their own credit card if they sense from your report that you like credit cards. Is that the purpose of a credit check for new customers wanting a checking account?

[lg8302ch]

Interesting aspect  .... I constantly get mortgage and car loan offers and that is something missing on my reports... I only have revolving accounts on it and never get offers for credit cards...LOL... but I still think this is a coincidence

[p-]

Depends on the bank.  USAA did not hard pull me for new bank accounts, but Penfed did require a membership pull.  I believe you can ask the branch reps what their policy is.

[RobertEG]

If you are siply opening an account with a bank and not applying for credit with the bank, their permissible pupose for pulling your credit report is with respect to a business transaction you have initiated with them that has a legitimate busness need for the bank to review your credit report in connection with that transaction.  Possibility of overdrafts, etc., can create possible consumer debt with respect to a new account, and thus is accepted as a legitimate business need.   It is not associated with credit.

Legally, one obtaining your credit report is prevented from using the report for purposes other than their stated permissible purpose.

FCRA 604(c)(1) prohibits a CRA from providing your full credit report for purpose of a party offering credit that you have not initiated.

If they wish to offer credit, they must so state, and can then submit their criteria to the CRA, and obtain a listing of all consumers who meet their criteria and who have not opted-out of being included in such listing.

They do not get a full consumer credit report, but simply a listing of consumers who meet their stated criteria, and to whom they must then make a firm offer for credit.  The so-called promotional inquires that result in the pre-approval offers consumers receive.