Why do some banks and credit unions do a hard pull?

[AllZero]

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@M_Smart007 wrote:

@AllZero, You may have to save this as a Macro

https://www.doctorofcredit.com/bank-accounts/is-opening-a-bank-account-a-soft-or-hard-pull/

Thanks to @randomguy1 

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@M_Smart007. Duly noted. 😉

[folks19]

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@randomguy1 wrote:

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@folks19 wrote:

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@randomguy1 wrote:

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@folks19 wrote:

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@randomguy1 wrote:

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@M_Smart007 wrote:

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@randomguy1 wrote:

Just a note, some of these financial institutions only do a hard pull when you do not decline overdraft protection.

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@randomguy1, Sure wish we had a master list of those!

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TBH, I just look on DoC and always decline overdraft. I usually have my credit locked as I'm not expecting a pull.

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@randomguy1 Do you know if SDFCU has that option?

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Most banks usually do. @Anonymous  might know. I do not have SDFCU. Do they have a bank bonus? 

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I mean to ask if SDFCU has the option of declining the overdraft line of credit and avoid the hard pull?

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Gotcha. That, I am not sure on. It looks like they are a hard pull. Your best bet is applying or asking them directly.

https://www.doctorofcredit.com/bank-accounts/is-opening-a-bank-account-a-soft-or-hard-pull/

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They do a hard pull. I actually asked that on this site, https://ficoforums.myfico.com/t5/Personal-Finance/Does-SDFCU-do-a-hard-pull-for-membership/m-p/6084766#M197043, and most people reported that they do a hard pull. Though, it seems like those who applied a few years ago only got a soft pull unless, of course, they also applied for credit. This only makes me wonder even more WHY DID THEY START DOING HARD PULLS? I assume there was some reason to why they felt a HP is appropreate.

[DaveInAZ]

I think a big reason why some banks/CUs do a HP is to make sure you don't have any active collections. Those can turn into a judgement and garnishment, and banks hate garnishments, it takes time, resources and $$$ to deal with those.

[Anonymous]

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@folks19 wrote:

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@Anonymous wrote:
Besides, with a CU you are becoming a part owner/member. It's not like a banking relationship. But I still don't like it.

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So I totaly understand if they want to do a full background check on me before "bringing me in as a partner", but why do a hard pull?

Again, a hard pull in "advertising to the world that one is seeking credit". A hard pull is not a background check. So unless the person is seeking credit, a hard pull is not appropreate.

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@folks19 don't get me wrong, I agree with you 100%, I'm just telling you their POV and it's only the very conservative ones. They want to put their mark on you, you're theirs now, I guess, lol. 

[folks19]

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@DaveInAZ wrote:

I think a big reason why some banks/CUs do a HP is to make sure you don't have any active collections. Those can turn into a judgement and garnishment, and banks hate garnishments, it takes time, resources and $$$ to deal with those.

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The thing is that they can get that information via a soft pull. A hard pull is only when one is seeking credit.

[folks19]

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@Anonymous wrote:

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@folks19 wrote:

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@Anonymous wrote:
Besides, with a CU you are becoming a part owner/member. It's not like a banking relationship. But I still don't like it.

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So I totaly understand if they want to do a full background check on me before "bringing me in as a partner", but why do a hard pull?

Again, a hard pull in "advertising to the world that one is seeking credit". A hard pull is not a background check. So unless the person is seeking credit, a hard pull is not appropreate.

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@folks19 don't get me wrong, I agree with you 100%, I'm just telling you their POV and it's only the very conservative ones. They want to put their mark on you, you're theirs now, I guess, lol. 

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I know you agree. I just think that some of the credit unions abuse their power by doing a hard pull.

Maybe they do it because they only want you to apply if you are really going to be loyel to them, and by doing a hard pull, you think twice before applying, and if you do decide to apply, you definitally want that relationship with the credit union. But again, I think that would be the credit union abusing their power.

[folks19]

The point is that I think it's a mystory why some credit unions do a hard pull. And by far, it is mostly credit unions and not banks. There must be a reason for this because there are a lot of credit unions with this practice.

[Anonymous]

And it also encourages you to use that pull to take advantage of a credit product within the next 30 days. But that is a little sticky ethically.

[folks19]

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@Anonymous wrote:
And it also encourages you to use that pull to take advantage of a credit product within the next 30 days. But that is a little sticky ethically.

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That's right! That can be antoher motive for a credit union to do a hard pull.

And furthermore, that does not apply to a bank because banks don't have "membership", and one can apply for a credit card with a bank without having a bank account. With a credit union, on the other hand, one must first become a "member" before applying for credit, so maybe the credit union wants to encourage the person to apply for credit.

I just wish I had a clear answer.

[Kforce]

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@Brian_Earl_Spilner wrote:

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@Anonymous wrote:
Read the Scoring Primer.

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Bro, I feel like I'm studying for a test when I try to read that thing.

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The test is Tuesday. 7/21/2020 @741051:00 PST