Question about opting in or out of soft inquiries...

[goodygoody]

Hi there. I noticed on another board, someone advised the poster to opt out of soft inquiries immediately and implied that they were the worst thing ever.  I haven't paid much mind to these, and always have about 20 on my CR when I check.  Didn't think it mattered because they can't affect your credit.  Am I wrong?  Should I opt out?  Are creditors able to do something wacky with soft inquiries that I don't know about?  I don't really mind receiving preapproved offers - I never really accept them (except my DH and I accepted Walmart's and got their card once), but never was bothered enough to opt out.  Am I missing something here and should opt out asap???  Curious.

[Booner72]

The reason to opt out is to prevent the CRA's from selling your info.   It also prevents anyone with a non permissible purpose to look at your credit.   it really isn't about the inquiries - and yes, softs don't hurt your score and on one else can see them.

Opting out prevents bottom feeder CA's from seeing what's up with you.  If you move - the CA"s send out "credit triggers" to anyone who buys their little plans, people that want to know what we consumers are doing with our finances.  When people are applying for mortgages, and they don't opt out, they are far more likely to have old collections pop up out of nowhere and ruin their home purchase.

The ONLY reason to stay opted in (and I have read everything I can find about the topic) is so you can get credit card offers in the mail.

OPT OUT OPT OUT OPT OUT.

[adavis425]

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@Booner72 wrote:

The reason to opt out is to prevent the CRA's from selling your info.   It also prevents anyone with a non permissible purpose to look at your credit.   it really isn't about the inquiries - and yes, softs don't hurt your score and on one else can see them.

Opting out prevents bottom feeder CA's from seeing what's up with you.  If you move - the CA"s send out "credit triggers" to anyone who buys their little plans, people that want to know what we consumers are doing with our finances.  When people are applying for mortgages, and they don't opt out, they are far more likely to have old collections pop up out of nowhere and ruin their home purchase.

The ONLY reason to stay opted in (and I have read everything I can find about the topic) is so you can get credit card offers in the mail.

OPT OUT OPT OUT OPT OUT.

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How do you opt out?

[RobertEG]

I have heard others speak about a practice of the CRAs selling credit report information to debt collectors.

The opt-out provsion relates to credit or insurance transactions not initiated by the consumer, as set forth in FCRA 604(c)(1)(B).  The permissible purpose provision of section 604(c)(1)(B) does not entitle the requestor to the consumer's full credit report, but only to consumer's name and address.  FCRA 604(c)(2).  Additionally, any inquiry under section 604(c)(1)(B) must provide, as a stated purpose, to make the consumer a firm offer for credit or insurance.  It cannot be used for any other purpose.

Debt collectors dont rely upon this provision to obtain consumer credit reports.  They rely upon the permissible purpose provision of FCRA 604(a)(3)(A), which entitles them to a consumer's full credit report based on a business or insurance transaction that was initiated by the consumer in order to collect on the account.  Opting-out wont prevent any party otherwise entitled to your full credit report from receiving it.  Apparently, the CRAs are selling information to debt collectors who dont have established collection authority on the debt????

If the CRAs are selling lists of consumer names and addresses for any purpose other than for the party to make the consumer a firm offer of credit or insurance, they are violating section 604(c)(1)(B).  Additionally, if they provide any information other than the consumer's name and address, they would also be violating section 604(c)(2).

Is there a good, documented source of such practices by the CRAs?  If so, it would appear to be prime fodder for a massive class-action suit.

[goodygoody]

Huh.  Well, as shady as business practices tend to be in the US, all this info is enough for me to opt out right now! And now I wonder if this is how some company got my name and social to call me to collect on some payday loan that I never took out...

And to the person who asked how to opt out, here's the site where you can do it:

https://www.optoutprescreen.com/?rf=t

[pipeguy]

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@RobertEG wrote:

I have heard others speak about a practice of the CRAs selling credit report information to debt collectors.

The opt-out provsion relates to credit or insurance transactions not initiated by the consumer, as set forth in FCRA 604(c)(1)(B).  The permissible purpose provision of section 604(c)(1)(B) does not entitle the requestor to the consumer's full credit report, but only to consumer's name and address.  FCRA 604(c)(2).  Additionally, any inquiry under section 604(c)(1)(B) must provide, as a stated purpose, to make the consumer a firm offer for credit or insurance.  It cannot be used for any other purpose.

Debt collectors dont rely upon this provision to obtain consumer credit reports.  They rely upon the permissible purpose provision of FCRA 604(a)(3)(A), which entitles them to a consumer's full credit report based on a business or insurance transaction that was initiated by the consumer in order to collect on the account.  Opting-out wont prevent any party otherwise entitled to your full credit report from receiving it.  Apparently, the CRAs are selling information to debt collectors who dont have established collection authority on the debt????

If the CRAs are selling lists of consumer names and addresses for any purpose other than for the party to make the consumer a firm offer of credit or insurance, they are violating section 604(c)(1)(B).  Additionally, if they provide any information other than the consumer's name and address, they would also be violating section 604(c)(2).

Is there a good, documented source of such practices by the CRAs?  If so, it would appear to be prime fodder for a massive class-action suit.

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Look at this "service" offered by Trans Union http://www.transunion.com/corporate/business/solutions/collections/third-party_collections-engine.pa...

How are they getting the information they are offering debt collectors if they are not data mining specific credit reports?

[goodygoody]

It really bothers me that these credit agencies are in so much control of our lives - whether we can buy homes, get cars on credit, etc., and then on top of it all they're selling our information to shady companies that drop often-shady debts onto our reports that we then have to spend hours removing (or giving up and paying, even when we don't really owe).  Seems to me that these agencies should be nonprofit consumer agencies.  I know this is just the "way things are," but it's obnoxious. 

[Anonymous]

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@goodygoody wrote:

It really bothers me that these credit agencies are in so much control of our lives - whether we can buy homes, get cars on credit, etc., and then on top of it all they're selling our information to shady companies that drop often-shady debts onto our reports that we then have to spend hours removing (or giving up and paying, even when we don't really owe).  Seems to me that these agencies should be nonprofit consumer agencies.  I know this is just the "way things are," but it's obnoxious. 

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Completely agree with the first part of your statement.  However, don't accept that it is just the way things are.  Tell your Congressmen, vote for politicians who share your view.  Write to support legislation that helps improve the system.  I don't know details, but I read on here earlier that there is some legislation in committee right now to provide more rules and oversight and finally update the 45 year old FCRA.

As for soft inquiries for offers of credit, I may do this some day when I have credit cards I am happy with.  As of right now, I can deal with the junk mail.  I got my only credit card (unsecured Cap One) through this system and am very grateful.