Information gained from a soft pull

[Anonymous]

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@BallBounces wrote:

BBS, if what you are saying is accurate (SP and HP provide the same data), then there really should be no such thing as an SP ...

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Sure there should... see the first paragraph I wrote in Post 7.  There are plenty of reasons that someone would perform a SP, basically any time a credit report is viewed without it being a request for credit.

For example, if there were no such thing as a SP, you wouldn't be able to monitor your own reports weekly with a tool like Credit Karma.  Or, you wouldn't be able to check a card site for a pre-qualified offer.  Or, your current CCC wouldn't be able to check your report for account maintenance.  Etc.

[RobertEG]

The best/clearest example of a type of inquiry that is coded as soft is the one single type of inquiry that MUST, by statute, be coded as soft.

The very definition of and distinction between what is commonly referred to as a "soft" inquiry is that it is not shown in credit reports that are provided to anyone other than the named consumer to which the inquiry applies.

FCRA 604(c)(1) defines a type of inquiry that is explicitly prohbited from being included in a consumer's credit report (see section 604(c)(3)), and also is limited in content to only the name and address of the consumer, and other information that does not identify any account or creditor specific information (see section 604(c)(2)).

MOre speicifically, section 604(c) is the process that applies to requests by creditors for which the consumer has not initiated any request for credit that permits such creditors to submit a listing of screening criteria to a CRA and obtain a listing of consumer names and addresses for the purpose of sending promotional, unsolicited offers for credit.

Seciton 604(c) is the only provision of the FCRA that limits the content recived by the inquiree and prohibits the CRA from posting a record of the inquiry in credit reports they issue to others.

Any other type of inquiry that is permitted by a CRA to be coded as "soft" is based on a business decision made by the CRA, and not by statute.  You can certainly contact any CRA and offer your opinion as to whether any specific type of inquiry other than the promotional inquiries provided for under section 604(c) should be coded as either hard or soft, but it is CRA discretion.  That discretion is based primarily upon the view of the CRA as to whether or not a given type of inquiry should be recorded and provided to others.

A common type of inquiry that is normally coded as hard, but the CRAs permit the inquiree to designate that they wish it coded as soft, are inquiries related to business transactions initiated by a consumer that are not the actual extension of credit.

Common examples are inquiries for evaluation of grant of utilities, apartment or auto rental, professional services, and cable or telecomm services.  You can certainly express opinion, either as an individual consumer or through a consumer trade organization, that seeks coding of such inquiries as soft, but it is ultimately a decision of the CRA.

[Revelate]

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@BallBounces wrote:

BBS, if what you are saying is accurate (SP and HP provide the same data), then there really should be no such thing as an SP ...

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Arguably any lender that is using a SP for a new credit extension, either new app or CLI, is doing it wrong.

But it's something that's been used and abused for probably more than a decade in Amex's case so apparently the lenders aren't that worried about it.

That said credit reports are used for all sorts of things these days, getting HP's from Verizon is just lame: it is absolutely not an extension of credit (phone plans used to get reported circa 2000) and as such it shouldn't ever be a HP... but meh.  Admittedly inquiries don't count for much maybe for this very reason.

[Anonymous]

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@Revelate wrote:

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Arguably any lender that is using a SP for a new credit extension, either new app or CLI, is doing it wrong.

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I agree.  And, many or even most are in fact doing it wrong when looking at it that way.

[BallBounces]

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@Anonymous wrote:

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@BallBounces wrote:

BBS, if what you are saying is accurate (SP and HP provide the same data), then there really should be no such thing as an SP ...

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Sure there should... see the first paragraph I wrote in Post 7.  There are plenty of reasons that someone would perform a SP, basically any time a credit report is viewed without it being a request for credit.

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Call it a CP (Consumer Pull).  That obviously should not negatively impact the profiled user.  

The point is, you and I (and the others)  agree the HP/SP distinction in it's current use is wrong.

[Anonymous]

I think the term "consumer" pull is a bit misleading, though, as it suggests it's only initiated by the consumer.  Financial institutions with which you do business for example typically do monthly SPs on your account (especially if they're providing a monthly credit score).  I take no issue with the term SP, just do feel that they're incorrectly used in the case of SP CLIs.

[Anonymous]

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@BallBounces wrote:

BBS, if what you are saying is accurate (SP and HP provide the same data), then there really should be no such thing as an SP ...

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Have you ever looked at the soft pulls on your credit report? Pull your annual credit report and scroll to the bottom and see who is soft pulling you. You will see hundreds, not joking, hundreds of soft pulls. You want all of those to be hard pulls? Your credit report would be bleeding from all those hits.

I personally have hundreds of soft pulls on my report just from American Express. I don’t have an AMEX card, yet 3 different divisions of AMEX have soft pulled be every week (yes week not months) for the last two years. I could opt out, but 99% of consumers not know they can opt out. I have another 30-40 soft pulls from various insurance companies and I have used the same insurance company for the last 10 years.

[BallBounces]

NO, I don't want them pulled at all unless I provided authorization to do so.

The point is, I don't think the way SPs are used today is how they were intended, and I think there is a better way to structure it.

[Anonymous]

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@Anonymous wrote:

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Have never looked at the soft pulls on your credit report? Pull your annual credit report and scroll to the bottom and see who is soft pulling you. You will see hundreds, not joking, hundreds of soft pulls. You want all of those to be hard pulls? Your credit report would be bleeding from all those hits.

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First, you're misunderstanding what has been said in this thread thus far.  What was said by myself and others is that SP CLIs in theory should all be HP CLIs since they're requests for [additional] credit.  The hundreds of SPs you referenced on your credit report are not additional requests for credit, so no one here is proposing that all of them be HPs.  Second, even if all of those SPs were in fact HPs, your credit report/score would not be bleeding.  Maximum damage from HPs comes at a point around (say) 15 HPs, so whether someone has 20 or 200 wouldn't make a difference as maximum penalty would have already been realized.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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Have never looked at the soft pulls on your credit report? Pull your annual credit report and scroll to the bottom and see who is soft pulling you. You will see hundreds, not joking, hundreds of soft pulls. You want all of those to be hard pulls? Your credit report would be bleeding from all those hits.

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First, you're misunderstanding what has been said in this thread thus far.  What was said by myself and others is that SP CLIs in theory should all be HP CLIs since they're requests for [additional] credit.  The hundreds of SPs you referenced on your credit report are not additional requests for credit, so no one here is proposing that all of them be HPs.  Second, even if all of those SPs were in fact HPs, your credit report/score would not be bleeding.  Maximum damage from HPs comes at a point around (say) 15 HPs, so whether someone has 20 or 200 wouldn't make a difference as maximum penalty would have already been realized.

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No, you are misunderstanding what I am addressing. I am not addressing the practice of SP for CLI and whether or not that should or should not be done. There are multiple topics being discussed here and I tried to be clear which one I was addressing. Whenever possible I try to use the "quote function" for this very reason.

As for the score impact of SP being HP...I never once mentioned score. That was not an oversight. I understand this topic is in the "understanding FICO scoring" section but I didn't see score anywhere in the original post. Score doesn't come up until the 6th and 16th post both by you. In hindsight I can see the "bleeding" comment by me may be taken to mean a hit to your score. It was not. When lenders pull in your raw data to review and spit out "too many inquiries etc." even with high scores that would otherwise get an applicant approved. That practice as well as the algorithm's being scoring would have to change if SP went away completely.

BallBounces said "then there really should be no such thing as an SP ..." so yes someone was saying that. After I responsed they later clearified that they mean SP should go away complately unless they authorize a hard pull. That clarification was not there when I posted.