Hard Inquiries for account review, dispute, or recon. . .

[Reighn9]

Why do banks have to run a hard inquiry when you dispute an adverse action they took on your account with only a soft inquiry review?  Examples, dropping the credit limit and the rep must run a credit check that results in a hard inquiry for eligibility for a CLI.  Questioning why your account was closed or sold when it wasn't delinquent, but the rep takes an application and runs an inquiry.  Now you have all these new inquiries that say you are looking for new credit when you were only trying to find out what was happening with your existing credit.  These banks review accounts constantly with soft inquiries and make critical decisions with just that information.  Why can't the customer dispute their action and request reconsidation based on the same type of information without being penalized even more?

[Medic981]

Hard inquiries should only be done with your express permission and when you are seeking credit such as a CLI, new account, and such. 

Soft inquiries are typically used for account reviews and the such. 

If your creditor is making HPs without your express permission that is a violation of the FCRA. If this is the case, I would file a complaint with the CFPB. Perhaps other MFers will have better insight.

[dragontears]

I logged in just to correct the misinformation posted in this thread.
Sorry medic981 but you are wrong. Lenders do NOT need "express permission" to conduct a HP; all they need is a "permissible reason". This is why auto dealership can shotgun your app to as many places as they want or why a ccc can do a HP when requesting a CLI (even when they don't ask for permission to pull credit) or even why utility companies can pull your credit (some times with as little information such as name and address)

[FinStar]

To add to the above comment, permissible purpose is expressly outlined in the CCA in connection to the product that an individual has. This is part of the agreement that an applicant agrees to whenever an individual clicks "submit" (after checking any applicable acknowledgements) in connection to an application.

These types of UW or internal policies whether to HP/SP, especially after AA was involved, will vary by lender.

[RobertEG]

The issue is handled by the CRA if the inquiry is coded properly.

Internal account review inquiries have express permissible purpose under FCRA 604 and do not need any express authorization from the consumer, but if coded properly as being for that permissible purpose, are treated per CRA policy as soft inquiries, meaning they are not included in any credit reports issue to anyone other than the named consumer.

If an inquiry was for an internal account review and it is appearing in credit reports obtained by others, it is likely simply a coding issue that can be corrected without any formal dispute.

[Brian_Earl_Spilner]

Guys, they're just saying they think it's B.S. that a bank doesnt need to do a HP to manage or penalize, but will do one to fix something.or when the customer is requesting action. They didnt say anything about HPs without permission.

[Reighn9]

Ok now I'm even more confused about getting hard inquiries for disputing adverse action on my accounts. I've alse gotten hard inquiries from car dealerships for answering an ad about a contest. I don't know any more what constitutes "express permission". I don't tell any of these people they can check my credit report and they don't tell me that's what they are doing either. They just say I'll have to review your file, put me on hold and when they come back they won't discuss my account because of my credit report and I will receive a letter. In the case of the car salesman he leaves to get my prize and comes back with the credit pull. I called the CFPB and she told me the same thing about "express permission" and read me the difference between soft inquiries and hard inquiries,and about hard inquiries remaining on your report for 2 years. She then asked if I wanted to file a complaint. Hard inquiries cannot effectively be didputed with the CRAs. So basically the banks and CCCs can do whatever they want with consumer accounts and if you try to dispute, review, or correct any of their actions your credit score goes down and and you are "looking for credit".

[Anonymous]

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@Brian_Earl_Spilner wrote:

Guys, they're just saying they think it's B.S. that a bank doesnt need to do a HP to manage or penalize, but will do one to fix something.or when the customer is requesting action. They didnt say anything about HPs without permission.

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Hi Brian.  You are right that the OP did not say anything about HPs without permission.  The contributors who are talking about that are responding to the first person who responded (Medic) who wrote: "Hard inquiries should only be done with your express permission...."