why would a financial institution check your ....

[happyscooter]

credit when you want to open a CD? 2 years ago we bought some CDs on line. Because we didn't go to the actual building, we had to send IDs and they did a credit check. When I checked our credit reports last year, that inquiry was on there. Last year we opened a savings account and bought a few CDs at a credit union. This year we opened our IRAs at the same credit union. A few days ago I saw on here that someone posted that you can get a free credit score from your credit union. I was in there making an IRA deposit and asked the rep if I could get a free credit score. She said 'it will be like a hard hit and deduct 5 points.' I said 'never mind'. She was able to pull up the one from last year and give it to me without it showing as a hit. But my question now is, why did they do a credit check when I wasn't borrowing money, I was giving them money.

[Deleted]

My first, cynical answer: because they can. The IDs, unfortunately, are required by The Patriot Act, which includes a lot of invasive new laws that treat us all like potential terrorists. One thought about the credit check is that every time you apply for credit you report your income and it goes into the record most of the time. Maybe they wanted to get an idea of your financial situation so they could see if it was worth it trying to sell you more lucrative investments, or offering you a credit card or HELOC.

[happyscooter]

Well, I knew they would have to check IDs and job/money issues if I was borrowing. But like I said 'I was giving them money'. Not really 'giving' them money but you know what I mean. And it isn't a debit card, credit card or checks. It isn't like I could write bad checks or withdraw money out of the ATM and have insufficient funds that they would have to collect. I would have to go in and sit down and sign papers to get my money back. An inconvenience to me really. So I should have been the one to check them out.

[Deleted]

Jun 29, 2011 6:44:23 GMT -5 happyscooter said:

Well, I knew they would have to check IDs and job/money issues if I was borrowing.

They need to get IDs for an asset account too, because of the Patriot Act. It's a legal requirement. But I agree with you that there's no need to protect themselves against credit risk when all they're doing is taking your money.

[nogooddeed]

Athena has part of the reason. The Patriot Act wants banks to view IDs, but also strongly recommends banks go a step further and pull a credit bureau report or other identity verification report to substantiate the provided ID, especially if you don't appear at the bank in person. Another federal law that plays into pulling the credit bureau report is the FACT Act which requires banks to aid in preventing identity theft.

[happyscooter]

Well, if it will help in preventing someone stealing my identity, ok. But can they steal the bills that I still owe?

[mithrin]

I've had my credit pulled often when opening new checking/savings accounts. I suspect that it's mostly about checking to see if they want to sell you a credit card or loans more than ID verification though. Cause every time the credit score comes back, they start trying to sell me on a mortgage, or car loan, or new credit card. Sorry, we rent, both our cars are paid off, and we already have credit cards with much better rewards than whatever you're offering.

The last time, they even tried to pitch me on taking out a personal loan that used my car as collateral

[bring in the new year]

The teller is wrong, I believe. When I was trying to get a mortgage, I was told this too, but then I was told it was hits from other people NOT hits from you which dinged the report. The thinking was you might be going on a real spending binge.

Personally I despiese the FICO system which as far as I can tell is based more on how to get and keep you in debt than anything to do with good credit. But if you have questions, you might want to email the FTC (who I think are responsible for government free credit reports) & double check with them.

You are legally entitled to a free credit report once a year (use the government site - NOT freecreditreport.com which is owned by Experian and makes its money on signing you up for a monitoring service) You are also entitled to a free credit report IF you've been denied credit, a job or housing based on your report.

Cynical me, I think that the Patriot Act may recommend that they check your credit, but the only reason banks would do it is to get a good estimate of your assets so they call sell you more stuff. Have you check the privacy reports at these financial institutions? Can you turn on the options to keep them from selling your name to other lists?

[gobermitcheese]

When I have opened online savings accounts in the past they will ask about items on my credit report to verify identity. I hate these questions because they are questions like what is the amount of the student loan you originated in 2007? Well I have multiple loans from all four years of college and they don't send regular statements. Also they were not in repayment at the time so I did not know what the monthly payment was.

[hoops902]

"The teller is wrong, I believe. When I was trying to get a mortgage, I was told this too, but then I was told it was hits from other people NOT hits from you which dinged the report. The thinking was you might be going on a real spending binge."

I don't think the teller was wrong. You're right in that inquiries from you don't ding your report, but OP was asking the teller to get her a report. That was my interpretation anyways, that OP wanted the teller to pull her credit report FOR her, which would count as a hard inquiry coming from the bank. In order to count as "from her" she'd need to request her report directly.

[happyscooter]

Hoops, yes that is it. We haven't seen our actual score in about 10 years. We have paid off the HELOC, which is how I got it that time. So I wanted the score. I do get all 3 reports each year. I space them out also. I even used to do it when it costs $6.00.