Generally speaking, it is because they have ill-trained employees that cannot differentiate between the coding for a "soft" pull and a "hard" pull. Then again, it is not unreasonable to presume that some entities do it in order to ding ones FICO scores. In any event, the do have a permissable purpose providing the collection is outstanding. With that said, I think such a purpose has its limits.
I'ld put more weight on the ding factor; 5-10 points here and there can add up. If they (and the other CAs) put enough dings on your report to jack up your interest rates when you want to get a new account, they can use them to extort from you.
Does the lender/collector decide how the inquiry is coded? I have never seen anything to support that. It would be interesting to read more about that. No matter who decides, the FCRA does not prohibit a pull from a collector from being hard. Even if they do it to get back at the consumer, there is not much that can be done as long as they have permissible purpose.
The CAs want to show this pull as a "collection effort or activity". A hard pull becomes evidence of collection effort should they need it. There are some CAs who do "soft pulls", but often they are fishing for business, looking for potential accounts to go after.
Just curious, is that the main reason to opt out while doing credit repair, esp if you are working towards a mortgage qualification later? To keep CA's from saying Lookie here what I found & she's looking for a mortgage, lets put some heat on! I am just learning how evil they are. Tegleg
Opting out does not affect collectors. If they have PP for a legit account, they can pull your report. They use other tools such as this to find out when you can pay and start collection activity. http://www.experian.com/collections_industry/index.html
