Hard Inquiries

[Anonymous]

I thjink it is UNFAIR to post inquiries!   Don't you think the information you get from a creditor is enough if the account goes delinquent???  Then, is when it SHOULD be posted.  I feel FICO should re-vamp the hard inquiries and change this.   Opal_718

[youdontkillmoney]

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@Anonymous wrote:

I thjink it is UNFAIR to post inquiries!   Don't you think the information you get from a creditor is enough if the account goes delinquent???  Then, is when it SHOULD be posted.  I feel FICO should re-vamp the hard inquiries and change this.   Opal_718

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^^^^^^^

If I was a lender/bank I would want to know what's coming down the pipeline in the sense that if you applied for 10 accounts, I wonder why you are opening all these accounts, so if you apply with me, I have a better idea of how much credit you will have available. Seems reasonable from a financial risk point of view to list hard inquiries.

[Anonymous]

FICO scoring is looking for factors on a report that predict future delinquency, and lots of inquiries are one such factor.

I don't think that FICO is saying by this that they necessarily endorse the current inquiry reporting system.  They're just using the information available.

[blondy250]

I disagree inquiries showing on your report are important.  It shows someone who is looking for credit, and many in short period of time is a risk to lenders that should and is taken into account.

[NoAnchoviesPlease]

Semi-related, apologies if not related enough:

Other than alleged competition, is there any good reason for three (or more) CRAs? 

If they don't get and/or report identical information, or if the information doesn't have the same value/result, it seems kinda dubious. Seems there should be no reason that the same FICO model would return different scores against the same person's history. I know sometimes that's a good thing, if the creditor pulls the score that's 50-100 points higher than the others, but I'd guess more people run into a case where they pull the one that's 50-100 points lower. 

[blondy250]

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@NoAnchoviesPlease wrote:

Semi-related, apologies if not related enough:

Other than alleged competition, is there any good reason for three (or more) CRAs? 

If they don't get and/or report identical information, or if the information doesn't have the same value/result, it seems kinda dubious. Seems there should be no reason that the same FICO model would return different scores against the same person's history. I know sometimes that's a good thing, if the creditor pulls the score that's 50-100 points higher than the others, but I'd guess more people run into a case where they pull the one that's 50-100 points lower. 

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Different scores use the same information but weigh it differently. They use different algorithms and risk models,  for instance take some score models take utilization into account more then others. Others weigh installment loans/mortgages differently; same info different scores.

[takeshi74]

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@Anonymous wrote:

I thjink it is UNFAIR to post inquiries!

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Why is it unfair?  Creditors look at HP's to see if a consumer is desprately seeking credit and, therefore, a risk.

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@NoAnchoviesPlease wrote:

Seems there should be no reason that the same FICO model would return different scores against the same person's history.

If the model and that data are identical the score will be identical.  If either vary (and there's much more than just one FICO model) then the scores can and will vary.

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@NoAnchoviesPlease wrote:

I know sometimes that's a good thing, if the creditor pulls the score that's 50-100 points higher than the others, but I'd guess more people run into a case where they pull the one that's 50-100 points lower. 

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It's all relative.  I'd guess that the aggregate differences are negligible but neither of us can really prove either guess.

[Revelate]

Personally I think the inquiry system should be updated:

Running my credit for an apartment rental check should not result in a HP; nor should insurance applications, nor background checks (in some states for both insurance and background checks, not allowed everywhere), nor should utilities or similar.

These are not credit seeking behavior which the inquiry system was designed to track: they should not count against my credit score as a result, and the fact that they do is simply because the current uses of a credit report have gone beyond what was originally designed for in my estimation.  I can sort of understand it in the case of subsidized cell phones or maybe getting a set top box from cable companies, but the system should exclude several types of pulls from being counted which currently do.

Beyond that it's perfectly fine, I'm even more conservative in stating there shouldn't be SP CLI's for the system to work as intended: likely needs an overhaul as there are both lender unfriendly and consumer unfriendly practices in my estimation.

[RobertEG]

Perhaps those concerns should be conveyed to Fair Isaac.

If such inquiries are not legitimate concerns in an analysis of risk of timely repayment of debts, they could choose to exclude them from their scoring analysis without any need to reform the credit reporting system. Reform would require revision of the FCRA permissible purpose provisions, and is most likely not high on the congressional priority list.

Fair Isaac apparently has data showing some corrrelation. 

I agree with the general arguments that they dont seem to affect analysis of risk of repayment of debt, but it would be interesting to hear the views of Fair isaac.

They could easily make a simple change to their algorithm if those types of inquiries had separate inquiry codes.