I understand the difference between hard inquiries and soft inquiries and their effect on your score. But, what I don't understand is this: How do they determine what type to make and is there any discretion on their part? In another thread, there is a complaint about numerous hard inquiries over a few days from a mortgage company. I understand why they pull more than one report, but do they all have to be hard? Do the CRA's dictate what has to be hard and what has to be soft? It appears that CA's all pull hard inquiries. I have seen here that some credit card companies pull hard inquiries and others pull soft when granting you credit. Are what they get any different when they pull a hard vs a soft?
Hard is inquiry in connection with a DECISION on whether to grant you credit eg a new credit card application Soft inquiries are when they want to 'check' your credit status AFTER you have opened an account with a company. OR the ones that indicate that you pulled your own credit report.
But, are there rules as to when they have to pull a hard or a soft? I know that some here have posted that the CC company only pulls a soft when deciding whether or not to grant you credit. As to the mortgage complaint, they make the decision to grant credit based on the first inquiry, and that is a hard. But, subsequent pulling of the credit is to check up on the customer to make sure there are no changes in credit status - does that have to be hard, or could they pull a soft? What I am getting at is how much discretion do they have?
One more thought. A cc company can do a soft for an AR after I get my credit card from them. Why can't a collection agency pull a soft to find out where I am so they can collect? Or can they? Maybe a hard inquiry is just their way of making life difficult for me. Which leads to another question. Is the information they get different when they pull a hard vs a soft?
They have all discretion. The reason I say that is because the FCRA does nto diferentiate between the two types, so in the CRA and credit grantors's point of views, its more of a courtesy. Not sure if the information they receive is the same for a soft and hard. Good question. That may be the deciding difference in why CAs choose to pull hard ones. For all we know, soft and hard inquiries may have different prices.
Hope this helps - http://www.ftc.gov/os/statutes/fcra/greenblt.htm (clip) Section 604(a)(3)(F) allows a consumer reporting agency to provide a consumer report to anyone who "has a legitimate business need for the information -- (i) in connection with a business transaction that is initiated by the consumer; or (ii) to review an account to determine whether the consumer continues to meet the terms of the account." Therefore, the brokerage firm may request a consumer credit report prior to establishing a relationship with an individual who applies to open an account, or thereafter to determine whether to discontinue doing business with an established client. If the brokerage firm misrepresents to a consumer reporting agency that it is requesting consumer reports pursuant to Section 604(a)(3)(F), however, and instead uses the reports in connection with the settlement discussions you describe, the firm is in violation of the FCRA. (end clip) monetary reparation discussion also a part of this letter
or this http://www.westbuslaw.com/AT-swcp_casesearchquery.html Attorney Use of Credit Reports of Opponent Violates Fair Credit Reporting Act Description Attorney representing patients in suit against a dentist obtained credit reports on dentist and his daughters. Appeals court upheld trial court verdict that such use was not business need allowed by the Fair Credit Reporting Act and upheld damage award. C A S E S U M M A R Y Facts McKinnon represented the patients of Bakker (a dentist), who were suing Bakker. McKinnon obtained credit reports on Bakker and his two daughters as background work for the litigation, supposedly to make sure he was not judgment proof and had not been transferring assets to his daughters. Bakker and his daughters sued McKinnon for violating the FCRA, for obtaining credit reports for purposes not allowed under the Act. District court held for plaintiffs, awarding each $500 compensatory damages and $5,000 punitive damages. McKinnon appealed. Decision Affirmed. The credit reports were "consumer reports" within the meaning of the FCRA. McKinnonâ??s use of the reports was not a legitimate "business need" under the Act, which specifies such needs to be credit transactions, employment purposes, insurance, government licenses, or other legitimate business needs. Citation Bakker v. McKinnon, â?? F.3d â?? (1998 WL 514652, 8th Cir.) or 152 F. 3d 1007 (8th Cir., 1998)
