We had a long thread a year or two ago in which I asked why a particular creditor would do hard pulls at all, given that typically the creditor has something to gain by not making his customer angry. How does it help that particular creditor in that instance to aggravate his current or potential customer by doing the hard pull -- when he can get the same info by doing the soft pull?
What most people would say is that the hard pull helps alert other creditors -- but that in a way intensifies the puzzle rather than resolving it. Why would Bank of America want to help out Chase? Again, we tended to hear as a response, "yeah but if everybody thought that way, then we wouldn't find out about any credit apps" which doesn't address the almost Darwinian importance of the event as it occurs in time. If you give people the option to pay taxes, then we should expect that almost no particular individual would pay, even though we can show that if everybody thinks that way it will cause our nation to collapse. Likewise, since individual creditors have an option to do a soft pull, their decision for each pull should be dominated by the desire not to offend a current or potential customer.
I had originally guessed at the time that there must be some kind of federal or CRA guidance that forced creditors to do hard pulls for all new accounts, but that turned out not to be true, if I remember right. No one is forcing creditors to do hard pulls, but they all somehow do them anyway (except for CLIs, credit union memberships, and SS loans, about which there is a wide diversity of practice -- again with no discernable pattern or rationale).
All interesting stuff to be sure.
