Business Models Debt Relief Industry

Using Soft Credit Report Pulls for Marketing? – Read This SoFi Case

Written by Steve Rhode

This case just crossed my desk and it’s a good read for any debt relief company who is using soft credit report pulls in marketing services or screening consumers.

“This case should serve as a note of caution for lenders marketing eligibility determinations based on a “soft” pull of a consumer’s credit report. Notably the FCRA does not draw a distinction between “soft” and “hard” credit report inquiries; both result in the delivery of a consumer report and both require a permissible purpose. So while “soft” pulls are frequently based on written instructions of the consumer before an application for credit is initiated, if the “soft” pull (and the fact that the “soft” pull will not affect the consumer’s credit score) is featured in any consumer facing language, creditors should consider: (1) Whether the permissible purpose for a subsequent hard pull is based on the consumer’s prior written instructions, new written instructions, or the initiation of a credit transaction (e.g. a clear application for credit); and (2) Whether a prominent statement that a subsequent application might result in a “hard” pull is necessary to dispel any potential misperceptions regarding the nature of that subsequent credit pull.”

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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