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Why does Navy Federal CU (and others) hard pull for membership app?

NiceMemesFam
Member

Why does Navy Federal CU (and others) hard pull for membership app?

......and more importantly what the heck are they looking for and under what circumstances would they deny you?

 

My basic problem right now is I have NO current credit. I have one derog which is a 6yr old utility bill for $350 which I wont pay because it was fraudulently put into my name at an address I didnt even live at, everything else was removed. The only "beneficial" account is an old paid off car loan which was paid off almost 10yrs ago and was PIF on time every month, in reality no one cares about this because its "what have you done for me lately?" with the banks.

 

For kicks and giggles I got a car through CARMAX only the worst of the worst worst worst subprime lender would offer me anything, every other lender rejected me. In the rejection letters it was always something along the lines of "insufficient trade history, insufficient revolving accounts, insufficient active accounts. We pulled this information from (CRA) your credit score is: N/A this CRA may not have enough information to give you a credit score" I do not have any FICO scores with any of the bureaus because I do not meet FICO guidelines for a score.

 

OK so my goal now is pay my car note ahead of schedule every month, get a couple of revolving cards secured if necessary (likely) and refinance out of this joke of a loan ASAP. I would like to join  NFCU because I hear they are lenient regarding thin files, low scores, etc; plus I like their cash rewards card which I want to work towards getting. I have a few grand to park at NFCU and I will setup Direct Deposit which I think will help my case if I need to recon for an auto refinance, etc. I want to get in the door with them and get their secured card right away so I can start building history with them. I dont want to muck around with joining my local CU or Alliant or anyone else that is super easy to join because their cards suck compared to NFCU/PenFed, etc. I just want to join NFCU and stay with them for life.

 

So here is my question: I already know if they pull my TU it will return an N/A score..... will they deny my membership over this? Why do they do a hard pull? Do they do it just to pre-qual you for things or do they actually deny people membership because they have no credit, even if they meet the other NFCU membership requirements? With all the people on this board that have joined NFCU/PenFed I know their have to be some people with bad/no credit that tried to get in.... has anybody been denied membership for a credit score related reason?

 

Thanks.

7 REPLIES 7
takeshi74
Senior Contributor

Re: Why does Navy Federal CU (and others) hard pull for membership app?

IIRC the pulls are typically done for identity verifcation.  Car dealers will pull even if you're not financing through them for identity purposes.  Extending credit isn't the only permissible purpose for a pull.  Keep in mind that one can join a CU without opening a credit product.

 


@NiceMemesFam wrote:

My basic problem right now is I have NO current credit. I have one derog which is a 6yr old utility bill for $350 which I wont pay because it was fraudulently put into my name at an address I didnt even live at, everything else was removed.


You don't just have no current credit.  That derog is a serious problem.  You need to figure out some way to address it.  If it is a case of fraud then you need to address it as fraud.  Don't overlook the Rebuilding subform and the stickies in each subforum including this one.

Message 2 of 8
NiceMemesFam
Member

Re: Why does Navy Federal CU (and others) hard pull for membership app?


@takeshi74 wrote:

IIRC the pulls are typically done for identity verifcation. 


You don't just have no current credit.  That derog is a serious problem. 


OK that makes a bit more sense, I will go ahead and apply with NFCU. I just didnt want to completely waste a hard pull if they are known to deny membership based solely on credit scores... but I cant find any information about them doing so which is why I was confused why they do a hard pull.

 

The derog is not that serious of a problem unless NFCU specifically tells me they wont auto refi me unless it is paid, it is already 6yrs old and falling off next year. I went to the Police about it years ago and they refused to get involved because I know the person that put the service into my name, they told me to take it to civil court..... OK so I go to the Circuit Clerk to file a civil suit against that person.... "sorry sir the statue of limitations has expired" .... lol k whatever. EVERYTHING else derog on all 3 bureaus has been deleted, and I will keep trying to get this one off. The collection agency keeps electronically replying back to the bureaus that the debt is valid, but I finally sent a written dispute to TransUnion demanding that this company produce proof of the original contract for service instead of just responding that the debt is valid. Still havent heard back on the latest dispute.

 

Ultimately it will fall off in 11 months regardless, I already have my auto loan and I can easily get 2 secured cards. The only legitimate need I have for credit in the next 12 months is the auto refi and unless NFCU tells me I have to pay it or no refi then I absolutely will not pay it. So nah, not that serious of a problem Smiley Very Happy

Message 3 of 8
Grafton88
Established Contributor

Re: Why does Navy Federal CU (and others) hard pull for membership app?

I joined NFCU in Sept. 2014.  I had no credit scores and was just finishing my payment plan on a Chapter 13 bankruptcy.  I think they only used it for ID purposes.

 

In March 2015 I got a secured CC from them.  In June I got a secured loan.  In April 2016 they converted my CC to unsecured and I now have a CL of $15K on the card.

 

Having a baddie on your reports can affect your ability to get unsecured loans.  I was turned down for their CLOC with a Public Record on my reports.

 

I think you will do fine in joining as long as you meet their criteria.

Message 4 of 8
Berk
Established Contributor

Re: Why does Navy Federal CU (and others) hard pull for membership app?

One basic reason for banks and CUs to do a hard pull when you open an account is for overdraft protection. One of many reasons I'm sure but 1 reason is enough. At least this is what my CU told me when I opened an account there 10 years ago.

Over $300,000 in credit across 12 cards.

FICO ranges from 807-813 as of 06/15/2021
Message 5 of 8
CreditDunce
Valued Contributor

Re: Why does Navy Federal CU (and others) hard pull for membership app?

NFCU may be willing to give you an unsecured CC and re-fi the auto loan.  I am not an NFCU expert, but I would give it a try.  I think you would have a good shot at both with DD.

 

You might want to post in on of CA's NFCU threads to get his attention.  He is much more knowledgeable about NFCU than me.

Message 6 of 8
NiceMemesFam
Member

Re: Why does Navy Federal CU (and others) hard pull for membership app?


@CreditDunce wrote:

NFCU may be willing to give you an unsecured CC and re-fi the auto loan.  I am not an NFCU expert, but I would give it a try.  I think you would have a good shot at both with DD.

 

You might want to post in on of CA's NFCU threads to get his attention.  He is much more knowledgeable about NFCU than me.


Thanks for all of the useful responses guys, I think I have a better understanding of why NFCU hard pulls from reading the replies. Also there is actually a disclosure on their "become a member" page that says this:

 

Consumer Reports: By submitting an application, you authorize Navy Federal to obtain a consumer credit report to evaluate your creditworthiness so that you may be considered for other Navy Federal products and services. You also authorize Navy Federal to obtain consumer reports for purposes of evaluating the membership application and reviewing any Navy Federal accounts you open. You understand these reports may be used in decisions to deny account applications, close accounts, and/or restrict accounts or services.

 

My main fear of simply being denied for not having any FICO scores has been addressed though, from what I understand banks and CUs will typically only deny account openings if you owe another bank or CU money for an account that was closed with a negative balance.... assuming of course all of your documentation is valid. However until I have FICO scores I doubt they would approve me for anything outside of a secured card.

 

@CreditDunce I have been reading those threads, and honestly I will just wait to apply until I at least have FICO scores. I really dont think it is reasonable to ask for an unsecured card or refi at this point. I mean there are "thin files", but mine is just a 6yr old derog and a 9yr old paid auto loan at this point....... new auto loan is in place and I will get 2 secured cards this week, I have no problem being patient and waiting for my scores to come online Smiley Happy

Message 7 of 8
CreditDunce
Valued Contributor

Re: Why does Navy Federal CU (and others) hard pull for membership app?

Going slow is going to be the most reliable way to get an unsecured card.  I can't fault your logic.  I know of kids NFCU have given unsecured cards with absolutely no credit.  But the ones I personally know are married to someone in the Navy.  NFCU is also known for offering their secured card for someone they can't approve for a unsecured card due to no credit history.  NFCU's secured card is one of the best because it has no fees and normally graduates to an unsecured card in a little over a year.

 

Good luck!

Message 8 of 8
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