topic Re: Information gained from a soft pull in Understanding FICO® Scoring

Information gained from a soft pull

Anonymous — Sun, 26 May 2019 00:31:13 GMT

I'm not sure if this is the right place, as there's several questions involved here, all stemming from a credit card application I recently attempted. I was told my online application for the Ducks card went pending, so after I while I checked my status online. There it said rejected. I called up customer service the following day, and was told that I was rejected due to a "thin credit file". However, no inquiries have shown on my TU or Experian credit reports. I haven't received the written rejection yet.

So, I was wondering if people could help with these questions:

- How much information can be gained from a soft pull? Can they determine a thin file from that?

- What constitutes a thin file?

- What can I do to thicken it?

Thanks, and apologies to mods if this needs to be moved!

Re: Information gained from a soft pull

Revelate — Sun, 26 May 2019 03:26:26 GMT

Basically everything on HP can be seen on a SP.

Thin file simply means you have too few tradelines for their underwriting requirements... the way to fix that is simply get more tradelines. How many do you have currently?

That said OCCU at least used to be an Equifax puller so I wouldn’t rule out a HP there yet.

Re: Information gained from a soft pull

Anonymous — Sun, 26 May 2019 08:01:22 GMT

@Anonymous wrote:

- How much information can be gained from a soft pull? Can they determine a thin file from that?
- What constitutes a thin file?
- What can I do to thicken it?

1 - They can see your entire CR from a SP, just like a HP, so yes they'd see your total number of accounts and whether your file is thin.

2 - 3 accounts or less is generally considered thin. Once you reach 4+, while your file definitely wouldn't be considered "thick" it likely wouldn't be considered thin any longer.

3 - Adding more accounts to your CR is the only way to thicken your file.

Re: Information gained from a soft pull

SBR249 — Sun, 26 May 2019 16:48:57 GMT

@Anonymous wrote:
3 - Adding more accounts to your CR is the only way to thicken your file.

I would say more accounts and time.

Re: Information gained from a soft pull

BallBounces — Sun, 26 May 2019 17:16:35 GMT

Sorry if it is already well known, but if the data culled from an SP and an HP is effectively the same, why is there a distinction? There has to be something that distinguishes an HP and leads lenders to performing one in addition to an SP.

Re: Information gained from a soft pull

Anonymous — Sun, 26 May 2019 17:33:23 GMT

@SBR249 wrote:
@Anonymous wrote:
3 - Adding more accounts to your CR is the only way to thicken your file.
I would say more accounts and time.

Time doesn't thicken your file, it ages your file. Aging a file is extremely important, so great job bringing up that factor. Aging however won't thicken a file, as it doesn't add any additional accounts... which is what is needed to take a thin file to a non-thin file. It's possible to have a thin/aged file, the same way it's possible to have a thick/young file. The goal of course is to obtain a thick/aged file, as for score segmentation purposes that's what's ideal.

Re: Information gained from a soft pull

Anonymous — Sun, 26 May 2019 17:40:10 GMT

@BallBounces wrote:
Sorry if it is already well known, but if the data culled from an SP and an HP is effectively the same, why is there a distinction? There has to be something that distinguishes an HP and leads lenders to performing one in addition to an SP.

The difference is that a HP leaves a mark on one's credit report showing that they were applying for credit. This mark can then be seen by other lenders that someone was applying for credit at that time. A SP can be used for many other things such as someone checking their own credit, current creditors performing account maintenance (checking up), potential creditors checking out your profile in order to possibly send you targeted offers, etc. Those things among others aren't applications for credit, so no need for a HP to be placed on your CR.

Where one of the slightly controversial topics comes into play would be SPs being used for CLIs. While [self-initiated] SP CLIs aren't applications for new credit, they are applications for additional credit. Some lenders such as Chase don't believe in SP CLIs and will get you for a HP if you want a CLI. Plenty of others (in fact the majority) do allow SP CLIs on occasion, meaning the customer can obtain additional credit without it being made known to everyone that they requested it.

Re: Information gained from a soft pull

BallBounces — Sun, 26 May 2019 17:44:40 GMT

BBS. I of course know that an HP leaves a mark.

You are implying then, the only reason to use an HP then is to concretely flag a consumer's discrete attempt at seeking credit. That's interesting.

If the data received is the same, the only reason to use an HP is to PLACE a condition on a consumer's CR. That's interesting, and a potential differentiator in the lending marketplace .......

Re: Information gained from a soft pull

Anonymous — Sun, 26 May 2019 17:54:07 GMT

@BallBounces wrote:

You are implying then, the only reason to use an HP then is to concretely flag a consumer's discrete attempt at seeking credit. That's interesting.

If the data received is the same, the only reason to use an HP is to PLACE a condition on a consumer's CR. That's interesting, and a potential differentiator in the lending marketplace .......

That is correct. The information obtained from a HP and SP is the same. The reason that lenders leave the HP is in order for other lenders to see it and in turn their [silent] agreement/expectation is that those other lenders will do the same thing and leave a HP if credit is requested from them. I think this is a great thing, but it would be better if it was a hard and fast rule that had to be followed. Getting back to my SP CLI example, it sort of gets watered down when some (in fact the majority) of lenders do extend additional credit without taking a HP.

I've long said that it would be "better" overall if all lenders used HPs for all CLIs, meaning SP CLIs would go away. I know that's a bold statement to make on a forum where SP CLIs are one of the most commonly talked about topics and sought after things credit-related, especially coming from a guy that's pounded the pavement for SP CLIs as much as the next guy. But, I simply play by the rules as they're currently presented. I would have zero problem though of all CLIs required HPs. It would create a level playing field and would make people think twice about going for CLIs, cause them to go for only the ones they "need" in many cases, etc.

Re: Information gained from a soft pull

BallBounces — Sun, 26 May 2019 18:06:52 GMT

BBS, if what you are saying is accurate (SP and HP provide the same data), then there really should be no such thing as an SP ...

Re: Information gained from a soft pull

Anonymous — Sun, 26 May 2019 18:14:25 GMT

@BallBounces wrote:
BBS, if what you are saying is accurate (SP and HP provide the same data), then there really should be no such thing as an SP ...

Sure there should... see the first paragraph I wrote in Post 7. There are plenty of reasons that someone would perform a SP, basically any time a credit report is viewed without it being a request for credit.

For example, if there were no such thing as a SP, you wouldn't be able to monitor your own reports weekly with a tool like Credit Karma. Or, you wouldn't be able to check a card site for a pre-qualified offer. Or, your current CCC wouldn't be able to check your report for account maintenance. Etc.

Re: Information gained from a soft pull

RobertEG — Sun, 26 May 2019 21:30:00 GMT

The best/clearest example of a type of inquiry that is coded as soft is the one single type of inquiry that MUST, by statute, be coded as soft.

The very definition of and distinction between what is commonly referred to as a "soft" inquiry is that it is not shown in credit reports that are provided to anyone other than the named consumer to which the inquiry applies.

FCRA 604(c)(1) defines a type of inquiry that is explicitly prohbited from being included in a consumer's credit report (see section 604(c)(3)), and also is limited in content to only the name and address of the consumer, and other information that does not identify any account or creditor specific information (see section 604(c)(2)).

MOre speicifically, section 604(c) is the process that applies to requests by creditors for which the consumer has not initiated any request for credit that permits such creditors to submit a listing of screening criteria to a CRA and obtain a listing of consumer names and addresses for the purpose of sending promotional, unsolicited offers for credit.

Seciton 604(c) is the only provision of the FCRA that limits the content recived by the inquiree and prohibits the CRA from posting a record of the inquiry in credit reports they issue to others.

Any other type of inquiry that is permitted by a CRA to be coded as "soft" is based on a business decision made by the CRA, and not by statute. You can certainly contact any CRA and offer your opinion as to whether any specific type of inquiry other than the promotional inquiries provided for under section 604(c) should be coded as either hard or soft, but it is CRA discretion. That discretion is based primarily upon the view of the CRA as to whether or not a given type of inquiry should be recorded and provided to others.

A common type of inquiry that is normally coded as hard, but the CRAs permit the inquiree to designate that they wish it coded as soft, are inquiries related to business transactions initiated by a consumer that are not the actual extension of credit.

Common examples are inquiries for evaluation of grant of utilities, apartment or auto rental, professional services, and cable or telecomm services. You can certainly express opinion, either as an individual consumer or through a consumer trade organization, that seeks coding of such inquiries as soft, but it is ultimately a decision of the CRA.

Re: Information gained from a soft pull

Revelate — Sun, 26 May 2019 22:15:11 GMT

@BallBounces wrote:
BBS, if what you are saying is accurate (SP and HP provide the same data), then there really should be no such thing as an SP ...

Arguably any lender that is using a SP for a new credit extension, either new app or CLI, is doing it wrong.

But it's something that's been used and abused for probably more than a decade in Amex's case so apparently the lenders aren't that worried about it.

That said credit reports are used for all sorts of things these days, getting HP's from Verizon is just lame: it is absolutely not an extension of credit (phone plans used to get reported circa 2000) and as such it shouldn't ever be a HP... but meh. Admittedly inquiries don't count for much maybe for this very reason.

Re: Information gained from a soft pull

Anonymous — Sun, 26 May 2019 23:19:15 GMT

@Revelate wrote:
Arguably any lender that is using a SP for a new credit extension, either new app or CLI, is doing it wrong.

I agree. And, many or even most are in fact doing it wrong when looking at it that way.

Re: Information gained from a soft pull

BallBounces — Mon, 27 May 2019 14:22:02 GMT

@Anonymous wrote:
@BallBounces wrote:
BBS, if what you are saying is accurate (SP and HP provide the same data), then there really should be no such thing as an SP ...

Sure there should... see the first paragraph I wrote in Post 7. There are plenty of reasons that someone would perform a SP, basically any time a credit report is viewed without it being a request for credit.

Call it a CP (Consumer Pull). That obviously should not negatively impact the profiled user.

The point is, you and I (and the others) agree the HP/SP distinction in it's current use is wrong.

Re: Information gained from a soft pull

Anonymous — Mon, 27 May 2019 15:17:04 GMT

I think the term "consumer" pull is a bit misleading, though, as it suggests it's only initiated by the consumer. Financial institutions with which you do business for example typically do monthly SPs on your account (especially if they're providing a monthly credit score). I take no issue with the term SP, just do feel that they're incorrectly used in the case of SP CLIs.

Re: Information gained from a soft pull

Anonymous — Tue, 28 May 2019 18:26:28 GMT

@BallBounces wrote:
BBS, if what you are saying is accurate (SP and HP provide the same data), then there really should be no such thing as an SP ...

Have you ever looked at the soft pulls on your credit report? Pull your annual credit report and scroll to the bottom and see who is soft pulling you. You will see hundreds, not joking, hundreds of soft pulls. You want all of those to be hard pulls? Your credit report would be bleeding from all those hits.

I personally have hundreds of soft pulls on my report just from American Express. I don’t have an AMEX card, yet 3 different divisions of AMEX have soft pulled be every week (yes week not months) for the last two years. I could opt out, but 99% of consumers not know they can opt out. I have another 30-40 soft pulls from various insurance companies and I have used the same insurance company for the last 10 years.

Re: Information gained from a soft pull

BallBounces — Tue, 28 May 2019 13:27:46 GMT

NO, I don't want them pulled at all unless I provided authorization to do so.

The point is, I don't think the way SPs are used today is how they were intended, and I think there is a better way to structure it.

Re: Information gained from a soft pull

Anonymous — Tue, 28 May 2019 14:44:03 GMT

@Anonymous wrote:
Have never looked at the soft pulls on your credit report? Pull your annual credit report and scroll to the bottom and see who is soft pulling you. You will see hundreds, not joking, hundreds of soft pulls. You want all of those to be hard pulls? Your credit report would be bleeding from all those hits.

First, you're misunderstanding what has been said in this thread thus far. What was said by myself and others is that SP CLIs in theory should all be HP CLIs since they're requests for [additional] credit. The hundreds of SPs you referenced on your credit report are not additional requests for credit, so no one here is proposing that all of them be HPs. Second, even if all of those SPs were in fact HPs, your credit report/score would not be bleeding. Maximum damage from HPs comes at a point around (say) 15 HPs, so whether someone has 20 or 200 wouldn't make a difference as maximum penalty would have already been realized.

Re: Information gained from a soft pull

Anonymous — Tue, 28 May 2019 18:58:40 GMT

@Anonymous wrote:
@Anonymous wrote:
Have never looked at the soft pulls on your credit report? Pull your annual credit report and scroll to the bottom and see who is soft pulling you. You will see hundreds, not joking, hundreds of soft pulls. You want all of those to be hard pulls? Your credit report would be bleeding from all those hits.

First, you're misunderstanding what has been said in this thread thus far. What was said by myself and others is that SP CLIs in theory should all be HP CLIs since they're requests for [additional] credit. The hundreds of SPs you referenced on your credit report are not additional requests for credit, so no one here is proposing that all of them be HPs. Second, even if all of those SPs were in fact HPs, your credit report/score would not be bleeding. Maximum damage from HPs comes at a point around (say) 15 HPs, so whether someone has 20 or 200 wouldn't make a difference as maximum penalty would have already been realized.

No, you are misunderstanding what I am addressing. I am not addressing the practice of SP for CLI and whether or not that should or should not be done. There are multiple topics being discussed here and I tried to be clear which one I was addressing. Whenever possible I try to use the "quote function" for this very reason.

As for the score impact of SP being HP...I never once mentioned score. That was not an oversight. I understand this topic is in the "understanding FICO scoring" section but I didn't see score anywhere in the original post. Score doesn't come up until the 6th and 16th post both by you. In hindsight I can see the "bleeding" comment by me may be taken to mean a hit to your score. It was not. When lenders pull in your raw data to review and spit out "too many inquiries etc." even with high scores that would otherwise get an applicant approved. That practice as well as the algorithm's being scoring would have to change if SP went away completely.

BallBounces said "then there really should be no such thing as an SP ..." so yes someone was saying that. After I responsed they later clearified that they mean SP should go away complately unless they authorize a hard pull. That clarification was not there when I posted.