Your opinion matters concerning inquiries. Please read and reply.

[Anonymous]

I have a serious issue with hard inquiries from entities that do not provide a credit service.  While I have no problem taking the hits from credit-providing inquiries I generate, inquiries coming from public utilities, cable and Direct TV, cellular providers, and property management agencies should not be considered hard inquiries.  It is my opinion that these services only be allowed to view your report as a testament to your ability to pay for said service, completely separate from credit-providing services.

I recently returned from living abroad after an 8 year hiatus to find that all the necessary public utilities charged me a service fee which included the cost of pulling my credit history.  The same applied when I considered renting from a few property management agencies in different areas of a metropolis.  Of course, the price of adequately sized and location of rentals drove our decision to buy which turned into build which in turn led us right back to leasing while the house was being built.

After some research into AT&T U-Verse and decided I wanted that service and I had to give permission for them to view my CH as well.  Lo and behold,  U-Verse was not available in the area I was renting but AT&T had an alternate service with Direct TV.  Since the two were separate companies, Direct TV also pulled my CH.  All in all, there were 12 different hard inquires on my CR in an incredibly short amount of time which did cause a small but significant drop in my CS as I was considering shopping for comparison mortgage rates up until I decided to pull my three bureau reports.  I opted to hold off on mortgage shopping since building afforded me time to allow the inquiry frenzy to cool off a bit.  I found the amount of services that require one to prove worthiness quite pitiful and then to find that they can actually affect your credit score equally disturbing and absurd.

I would like to start a petition to get the FCRA to update the guidelines on these types of inquires to match those of promotional inquires only.  None of these agencies were extending me a line of credit therefore neither of them should have the ability to affect my credit score which is in fact due to the lack of regulation by the FCRA in instances such as these.

Your objective thoughts and opinions matter.  Thanks for taking the time to read my semi-rant.

Nyo

EQ 716

TU 726

EX 711

[RobertEG]

First, and formost, when dealing with the issue of "hard" vs "soft" credit inquiries, this issue it not regulated by the FCRA.  The FCRA does not use those terms, and the only statutory distinction between inquiries are those that are sanctioned by one or more of the permissible pull purposes under FCRA 604, and those that are limited only to so-called promotional inquiries (unsolicited offers for credit). Under FCRA 604(c)(2), creditors making inquiries for the purpose of sending you promotional offers for credit may only receive the name and address of the consumer.  Other permissible inquiries give entitlement to your entire credit report.

Second, the FCRA specifically sanctions credit inquiries for both credit and business initiated transactions.  A major part of the purpose for credit inquiries is to evaluate a consumer for business related transactions they initiate.  To limit inquiries to only those related to credit transactions would require a major ovehaul of the FCRA.

The real distinction between hard and soft inquiries ultimately rests with Fair Isaac.  In actuality, a "hard" pull is one that FICO chooses to score, and a "soft" pull is one that they do not choose to include in your scoring.  To factilitate this distinction, the CRAs have established approx a dozen different inquiry codes, and records each inquiry code based on the reason for permssible pull provided by the requesting party.

It might be easier to persuade Fair Isaac to alter their scoring algorithms than it would be to get Congress to undertake such a major revision of the FCRA.  Such revision would be strongly opposed by the various consumer business lobbies.

[Anonymous]

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@RobertEG wrote:

First, and formost, when dealing with the issue of "hard" vs "soft" credit inquiries, this issue it not regulated by the FCRA.  The FCRA does not use those terms, and the only statutory distinction between inquiries are those that are sanctioned by one or more of the permissible pull purposes under FCRA 604, and those that are limited only to so-called promotional inquiries (unsolicited offers for credit). Under FCRA 604(c)(2), creditors making inquiries for the purpose of sending you promotional offers for credit may only receive the name and address of the consumer.  Other permissible inquiries give entitlement to your entire credit report.

Second, the FCRA specifically sanctions credit inquiries for both credit and business initiated transactions.  A major part of the purpose for credit inquiries is to evaluate a consumer for business related transactions they initiate.  To limit inquiries to only those related to credit transactions would require a major ovehaul of the FCRA.

The real distinction between hard and soft inquiries ultimately rests with Fair Isaac.  In actuality, a "hard" pull is one that FICO chooses to score, and a "soft" pull is one that they do not choose to include in your scoring.  To factilitate this distinction, the CRAs have established approx a dozen different inquiry codes, and records each inquiry code based on the reason for permssible pull provided by the requesting party.

It might be easier to persuade Fair Isaac to alter their scoring algorithms than it would be to get Congress to undertake such a major revision of the FCRA.  Such revision would be strongly opposed by the various consumer business lobbies.

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Actually, I would say that FICO does not determine which inquiries are soft and which are hard.  This is determined by the CRA itself and falls into the heading of "inquiries which may effect your credit score / viewable by other creditors" and "inquiries which do not effect your credit score / not viewable by other creditors". 

In any event, when you apply for, say, telephone service there actually is an extension of credit.  The company is first giving you service and then you pay a month or so after service is rendered.  This is credit.

Still, I think inquiries by utility companies should be handled differently.  Moving into a new home can result in several inquiries just to establish gas, electric, phone and other basic services and that should not be made to look as though you are actively seeking credit.

[Jazzzy]

I would add (as a rental property owner) that renting to someone also involves granting credit.

There is always the danger that someone may move into a unit and quit paying rent. It can take months to get them out. As the owner, I am granting credit...I am giving them possession of a unit worth thousands of dollars per year and hoping that they pay me as agreed.

[SocalMark]

I'm also a rental property owner and always ask for the first month & deposit before renting and that's after checking their credit. 

[RobertEG]

FICO determines which inquiries are included in your credit scoring.  The CRAs determine, not by statute or regulation, but by internal practice, how long inquiries will continue to be listed in a consumer's credit report (i.e., two years).  FICO then carries it s step further, and  chooses not  to include inquiries in their credit scoring, even though still in the consumer's credit file, after one year.

Yes, it is the responsiblity of the inquiree to to accurately report a permissible purpose, and yes, it is the responsibility of the CRA to record their purpose with the correct credit file field code. 

Ultimately, what consumers call a "hard" or "soft" inquiry resides with the result.  Is it included under FICO scoring?  The reason may be the incorrect reporting of the permissible purpose, or the improper coding of it by the CRA.

So I think we are saying the same thing.  Most incorrect inclusion of credit inquiries in FICO scoring is, I agree, not the fault of decision making made by the FICO algorithm.  But the inclusion of correctly reported inquiries for business, rather than simply credit, purposes certainly is a decision of the FICO scorers.

All of the dispute around credit reporting and scoring of inquiries, resulting in disputes over a primarily administrative process, resulting in efforts by the creditor lobbies to exclude all disputes pertaining to credit inquiries from the new direct dispute process.  They were successful in that effort, resulting in the total exemption of credit inquiry disputes from the newly-implemented direct dispute process.  See 16 CFR 660.4(b)(iii).