1 Application Turned into Multiple Credit PullsJuly 30, 2010 | By: Sean Murray
Many merchant cash advance applicants have filled out a single form only to later find out their credit was pulled multiple times. This is common amongst brokers. Many brokers will take the application and then submit it to multiple Cash Advance Providers for review. They do this to increase the applicant’s chance of approval and ultimately come out with the best deal.
There is a flip side to this strategy that every applicant should be aware of. Credit inquiries affect FICO score. Though multiple pulls in a very short span of time won’t be as damaging as if they were spread out (Credit Agencies realize that people shop for credit and thus your score isn’t lowered as much), the actual record of the inquiry will remain on the report for 2 years.
If there are upwards of 4 pulls or more, this can have negative implications. Many Cash Advance Providers view inquiries from competitors as a bad sign and there are instances where applicants will be declined simply because they’ve “over shopped.“
If an applicant was credit worthy to begin with and they were planning on obtaining a mortgage or auto loan in the near future, this needs to be seriously considered. That mortgage or car loan may no longer be available because of too many credit inquiries.
Advice: Anyone applying for a merchant cash advance should discuss with their account representative before hand to find out exactly how many times their credit will be pulled and what entities will be pulling it. Authorizing an entity to pull credit does not grant anyone unlimited usage for an indefinite amount of time.
If any applicant feels their credit was pulled more times than was authorized or by unauthorized entities, they should contact the entity responsible. The entity is required by law to prove they had authorization to pull credit. If they made the inquiry in error, they are required to send you a letter stating just that. This letter can then be used to have the inquiry removed when contesting with the Credit Agency.
If the entity does not respond within 30 days, they can be in violation of the Fair Credit Reporting Act.Last modified: July 7, 2015
Sean Murray is the founder of deBanked, an 11-year veteran of the merchant cash advance industry, a casual Lending Club and Prosper note investor, the co-founder of Daily Funder, an alternative lending speaker, consultant, writer, and enthusiast. Connect with me on LinkedIn or follow me on twitter.