How does pre-approval work? Where does the consumer report data come from?

[Anonymous]

Heya.  I'm new to this board, although I've been lurking around for a while.  Apologies if this is the wrong section for this question, I assume this is the most appropriate place, as it's related to credit card pre-approvals.  On to the question:

How do banks gather data to determine pre-approvals for credit cards? I know the banks that pre-approve you for a credit card will use data gathered from other banks or associate companies, based on your consumer reports.  But exactly how do they get up-to-date information on you without doing a hard pull?  Or is the information they have on file only as current as the last hard pull you made?

Here's an example of what I'm trying to figure out:

• Let's say I apply for a card (with hard pull) at Bank1 on Jan 1st 2014.  TU is pulled with a 650 score.

• I don't initiate any more hard pulls the next 10 months

• myFico shows my TU has shot up to 720

• On Nov 1st 2014 (10 months since last hard pull), I check for a pre-approval with Bank2.  They do a soft pull of my TU.  What TU data do they see?  The last hard-pull, which was 650?  Or do the bureaus somehow give them more up-to-date information? 

Basically what I'm wondering is - is it necessary to do hard inquiries from time to time in order to receive more accurate pre-approvals from banks?

Thanks!

[-NewGuy-]

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@Anonymous wrote:

Heya.  I'm new to this board, although I've been lurking around for a while.  Apologies if this is the wrong section for this question, I assume this is the most appropriate place, as it's related to credit card pre-approvals.  On to the question:

How do banks gather data to determine pre-approvals for credit cards? I know the banks that pre-approve you for a credit card will use data gathered from other banks or associate companies, based on your consumer reports.  But exactly how do they get up-to-date information on you without doing a hard pull?  Or is the information they have on file only as current as the last hard pull you made?

Here's an example of what I'm trying to figure out:

• Let's say I apply for a card (with hard pull) at Bank1 on Jan 1st 2014.  TU is pulled with a 650 score.

• I don't initiate any more hard pulls the next 10 months

• myFico shows my TU has shot up to 720

• On Nov 1st 2014 (10 months since last hard pull), I check for a pre-approval with Bank2.  They do a soft pull of my TU.  What TU data do they see?  The last hard-pull, which was 650?  Or do the bureaus somehow give them more up-to-date information? 

Basically what I'm wondering is - is it necessary to do hard inquiries from time to time in order to receive more accurate pre-approvals from banks?

Thanks!

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Welcome to the fourms. If you go to a site and manually check for pre-approvals (like Chase, etc) they will do a SP of your credit. This SP gives them up to date information, not information that is stored somewhere since the last HP.

[Anonymous]

Gotcha, that alone clears up a lot of confusion on my end.  So the only other thing I'm curious about is, where do they get current information using soft pulls?  Do they credit bureaus just give up that data for free?

Does this mean that checking pre-approval offers within days or weeks of my score going up might yield different results?

[Shock]

Think of HP's and SP's as a screenshot of your credit profile. When lenders look at it, they will see what is there at that exact moment. Nothing before, nothing after. 

Or think of it as a job interview. The person interviewing you only sees you at the time of the interview, not before, not after. So you just make sure that when you are interviewing (applying for cards) you make the best impression at that very moment.

[Shock]

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@Anonymous wrote:

Gotcha, that alone clears up a lot of confusion on my end.  So the only other thing I'm curious about is, where do they get current information using soft pulls?  Do they credit bureaus just give up that data for free?

Does this mean that checking pre-approval offers within days or weeks of my score going up might yield different results?

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I dont think checking for offers yourself will yield different results. If only there was a way for you to express interest without applying and they would see that you inquired, and would soft you and send you preapprovals!

[vanillabean]

I read somewhere that credit card lenders ask the credit bureaus for names and addresses of people whose score is within a certain range. No other information is exchanged, and I don’t know whether there is a charge for the information.

[Anonymous]

Ahh, thanks Shock! That makes a lot of sense.

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@Shock wrote:

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@Anonymous wrote:

Gotcha, that alone clears up a lot of confusion on my end.  So the only other thing I'm curious about is, where do they get current information using soft pulls?  Do they credit bureaus just give up that data for free?

Does this mean that checking pre-approval offers within days or weeks of my score going up might yield different results?

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I dont think checking for offers yourself will yield different results. If only there was a way for you to express interest without applying and they would see that you inquired, and would soft you and send you preapprovals!

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[Anonymous]

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@Anonymous-own-fico wrote:

I read somewhere that credit card lenders ask the credit bureaus for names and addresses of people whose score is within a certain range. No other information is exchanged, and I don’t know whether there is a charge for the information.

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I would very much assume that  there is a charge for that!   The CRA has compilied the data from all the different issuers, so it is their work product,  and this is data that the marketing group of the ccc wants.