4 ms·

But pragmatically if they switch banks behind the scenes, that would usually require a hard credit pull every time it occurs. This would seem to hurt a person'

But pragmatically if they switch banks behind the scenes, that would usually require a hard credit pull every time it occurs. This would seem to hurt a person's credit score if that was what actually occurred (that's why the semantics are important).

mahyarm 15y ago
Maybe the definition of a hard credit pull should be changed? It discourages people from shopping for loans since you often cant get a real interest rate quote until that provider gets your credit rating themselves anyways.
- ironchef 15y ago
  Well...I think FICO scores should be revamped anyways, but if you're shopping for loans, from what I recall, you only get hit once per 30 days (as obviously if you're in the market for a loan, you shouldn't be negatively affected for every vendor you approach).
bradleyland 15y ago
Banking is an industry that is not nearly as simple as it seems. There is a difference between "you" walking in to a bank wishing to establish an account and a "partner" like Simple seeking to move depository funds between banks. The bank pulls a credit check on you, the individual, to mitigate risk. A company like Simple would secure a bond or insurance to mitigate this risk for the partner bank, reducing the friction for a business critical action (moving partner banks). Pragmatically, Simple wouldn't survive very long if every customer were hit with a hard credit pull every time Simple moved their funds. I'm not even sure that would be legal.
- ironchef 15y ago
  Sure. I would assume it would be very similar to the pre-screening credit card companies do (which does not negatively affect a person's credit); however, if you look at the common components of a person's FICO score, a number of factors _could_ be adversely affected depending on how these things are done (closing of revolving accounts, length of credit history, credit searches, etc.). People are asking questions because it's a complex subject...and while people want to believe they won't be adversely affected, that doesn't mean it won't happen. Simply due dilligence I think.

mahyarm 15y ago

Maybe the definition of a hard credit pull should be changed? It discourages people from shopping for loans since you often cant get a real interest rate quote until that provider gets your credit rating themselves anyways.

ironchef 15y ago
Well...I think FICO scores should be revamped anyways, but if you're shopping for loans, from what I recall, you only get hit once per 30 days (as obviously if you're in the market for a loan, you shouldn't be negatively affected for every vendor you approach).

bradleyland 15y ago

Banking is an industry that is not nearly as simple as it seems. There is a difference between "you" walking in to a bank wishing to establish an account and a "partner" like Simple seeking to move depository funds between banks. The bank pulls a credit check on you, the individual, to mitigate risk. A company like Simple would secure a bond or insurance to mitigate this risk for the partner bank, reducing the friction for a business critical action (moving partner banks). Pragmatically, Simple wouldn't survive very long if every customer were hit with a hard credit pull every time Simple moved their funds. I'm not even sure that would be legal.

ironchef 15y ago
Sure. I would assume it would be very similar to the pre-screening credit card companies do (which does not negatively affect a person's credit); however, if you look at the common components of a person's FICO score, a number of factors _could_ be adversely affected depending on how these things are done (closing of revolving accounts, length of credit history, credit searches, etc.). People are asking questions because it's a complex subject...and while people want to believe they won't be adversely affected, that doesn't mean it won't happen. Simply due dilligence I think.