I just joined a local credit union in order to buy a Certificate of Deposit with them. They had an attractive rate of 1.25% on a 12-month CD. (Not much better than putting the money under your mattress, but I need to keep some money in cash right now.) Before I bought the CD, I had to open a small savings account. During the application the bank accessed my credit report, and did what is what is known as a “hard pull,” which is an inquiry which shows on your credit report for two years, and may lower your credit score. Typically, hard pulls are done when you apply for a credit card, mortgage, or car loan. They also have the option to do a soft pull, which is what happens when you check your own score, or what the credit card companies do when they target you for a new credit card offer.
The hard pulls are a problem for people like me who make frequent applications for mileage earning credit cards. If we have too many inquiries on our credit reports, we may be denied for a card. Since I value a credit card pull at $400 or more, I need to make sure that I get that value whenever an inquiry is made. The problem is that banks won’t tell you what kind of pull they are going to use UNLESS YOU ASK, or you find it somewhere in the fine print.
I was recently researching CD’s with BankDirect (see Bank Direct CDs for AAdvantage Miles.) If you search on the website you will find a small link at the bottom of their page called “Disclosures” From that page there is another link “Additional Disclosures.” When you click that your computer downloads a multi-page booklet. If you haven’t become frustrated at this point, you can read on page three of the pamplet the following disclosure:
“We may make any inquiry that we consider appropriate to help us determine if we should open, maintain or close your Account. In the event we consider an inquiry appropriate, such inquiry may include verification of employment, previous banking relationships, credit reports or other reports from Account information services and credit reporting agencies. Without limiting the foregoing, you acknowledge and agree that we reserve the right to refuse to open an Account for you.
If you do any business with them, they MAY or MAY NOT pull your credit report. You won’t know unless you have a look at your credit report after you open your account. This should be disclosed, not in the fine print, but on the application pages. The next time I open an account, I am going to call and confirm the kind of credit pull they require before I do business with them.