Why hard pulls?

[Anonymous]

Hello,

  Might be a sily question but.... Why do they do hard pulls to check credit? What is the difference in what a lender learns between a Hard or Soft pull? 

[RobertEG]

With the sole exception of an inquiry made to obtain names of consumers for which a creditor wishes to make an unsolicited offer for credit  (so-called "promotional pulls"), the inquiry gets a full consumer's credit report for either a hard or soft pull.  No difference.

The difference between soft and hard pulls is whether or not the inquiry is shown on credit reports obtained by others.

So-called hard pulls shown in credit reports made available to parties other than the consumer.

A record of solft pulls appear only on consumer's report that is obtained by the consumer themselves.  They thus cannot be scored.

Hard pulls are those that are considered by credit scorers to be indicative of increased consumer risk, and thus are part of their scoring algorithms.

[Anonymous]

If there is no difference in what the lender learns why do more places not do Soft pulls? Credit Unoin told me they had to do a Hard pull of my credit to open an account?  Seems this could have better been done a s a soft pull.  They would have learned all they needed and opening a CU account shouldn't need to reflect on my credit report?. 

[Berk]

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@Anonymous wrote:

If there is no difference in what the lender learns why do more places not do Soft pulls? Credit Unoin told me they had to do a Hard pull of my credit to open an account?  Seems this could have better been done a s a soft pull.  They would have learned all they needed and opening a CU account shouldn't need to reflect on my credit report?. 

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Hard pulls become a part of your public credit report. Without hard pulls creditors would not be able to assess the risk they would be assuming were they to lend you money. Think of it as Angie's List for lenders. They want to know your reputation before they lend you money. You do it all the time as a consumer you just don't think of it as the same way. Ever rate a day care, hotel, restaurant, product, etc? Kinda hard to do if the info wasn't public.

[takeshi74]

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@Anonymous wrote:

opening a CU account shouldn't need to reflect on my credit report?. 

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It's up to the CU/bank if they hard pull to open an account.  Some do, some do not.

[TheGardner]

As for CU pulls to open an account I have no idea why they do this but most do.

The reason banks/CC issuers choose HP over SP for requests for credit is basically them looking out for each other. As a consumer hunts for more accounts or acts desperate for credit this behavior will be reflected. These pulls also trigger alerts to your current lenders so they will know when you are actively seeking more credit. 

Also lenders will see patterns with your debit. If you open a new account every 6 months to a year and transferring balances while never paying down debit this will also help lenders track that.

Basically if a lender is already nervous of someone's credit patterns and they see more inq (doesn't have to be a lot either, think high DTI or balances) they may choose to close the accounts this is primarily what we see with the "Barclays is sensitive" posts on these boards.  

[AndySoCal]

A hard pull is for the pursuit of new  / additional credit. A soft pull is for a lender monitering your credit that you have an account with or a cinumser pulling your credit report..

[TRC_WA]

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@AndySoCal wrote:

A hard pull is for the pursuit of new  / additional credit. A soft pull is for a lender monitering your credit that you have an account with or a cinumser pulling your credit report..

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I know that's how it's supposed to be.. .and I can also tell you that BECU did a HP for a $1500 CLI on my Visa back in June... and I just got a $7k personal loan from Lending Club last week that was a SP.

I'm not complaining... my TU score is being dragged down by lingering inquiries from late 2013 when I opened multiple CC accounts... the last one being Dec 2013.  I'm expecting it to rebound when these inquiries age past 1 year and they supposedly no longer factor into my score.

Every single one of my creditors pulls TU.  What are the odds?

[AndySoCal]

As far as Lending club is concerned If you are an existing  with them they may have had the soft pull and were able to use for the personal loan. If you had no prior relationship with Lending CLub and they did a soft pull that would be unusual. My personal philosphy on on credit pulls is always expect a hard pull when I ask for new or additional credit.  The question I aks myself is it worth the hard pull. One of the reasons I have inquiry for three years.

[Anonymous]

Why do credit union hard pull for opening a checking or savings account? We're not ask for credit.
I'm trying to park my money, not asking for credit. It's the dumbest reason to take a inquiry.
I got 4 hard pulls for trying to park my money.
Screw you DCU, for your double pull; I really need to forgive and forget, but I can't.