Credit Checks: Hard Pull vs. Soft Pull
Whenever a business pulls your credit report, it conducts either a hard pull or a soft pull. A hard pull dings your credit score (generally no more than 10 points, if that) while a soft pull has no impact on your credit scores at all. Hard pulls are associated with financial transactions in which there is a measure of risk, whereas soft pulls are not. For example, if you apply for a loan or credit card, your lender will conduct a hard pull because the inquiry is related to a financial transaction. When an employer pulls your credit or you pull and review your own credit report, the inquiry falls into the "soft pull" category because is not connected to a financial transaction.
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Collection Agency Made Numerous Hard Pulls
The Fair Credit Reporting Act allows your current creditors to pull your credit reports whenever they wish. This includes debt collectors. Any rational person would expect a collector to pull their credit report intially, but some collection agencies make multiple hard pulls. If the collection agency's trade line on your credit report weren't bad enough, multiple hard inquiries within a short time frame can literally kill your credit scores. Some collection agencies go so far as to pull your credit report every month.
Why do they do this? Most will claim they do so to keep an eye on your assets and see if anything in your financial life has changed – rendering you able to pay off your debt. But collection agencies are capable of conducting soft pulls to meet this goal. If a debt collector is conducting a hard inquiry every month, the company is likely intentionally damaging your credit score as much as possible. This is especially true if you still have a decent credit rating after the collection trade line appears on your report.
Also, negative information hurts your credit scores less as time goes by. By making numerous hard credit inquiries, debt collectors make your life that much more difficult. The rationale behind this (imho) is, "If we harass these debtors for long enough, they'll eventually pay us simply to get us off their backs." Even worse, your current and future creditors can see which companies have conducted hard pulls in the recent past. A slew of hard inquiries from a debt collector can indicate you're in financial trouble – leaving future lenders to think twice before doing business with you. This serves two purposes: it makes you more likely to pay off the debt to stop the harassment and it also reduces your chances of acquiring new debt – leaving you extra income that you can now apply to your collection debt.
Related Articles:
Collection Agencies Conduct Hard Credit Pulls Without Your Permission
How to Get Real Free Credit Reports Without a Credit Card
Collection Agency Re-aged Derogatory Information on Credit Report
Credit Checks: Do Collection Agencies Conduct a Hard Pull or Soft Pull of Your Credit Report?
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