Is it legal for a creditor to pull my credit reports after settling with them?
Let’s say you’re being sued by an original creditor, Capital One, for $10,000. You settle for $5,000.
Once this has been settled, Capital One should show the balance as $0. You no longer owe them anything.
If they leave it at $10k, that’s false credit reporting.
If they listed the balance as $5,000 (the difference between the original amount and the amount of the settlement) this is still wrong.
You owe nothing.
Pull your credit reports and look for inaccuracies
Are they showing the correct balance? If they are not, dispute through the credit bureaus.
Is Capital One pulling your credit reports after the debt has been settled?
Continue to look at your credit reports a week later, a month later, 6 months later.
At the time of this article through April 2021 you can pull your credit reports once per week through Annual Credit Report.com.
Check to see if Capital One is showing up as an inquiry.
There are two types of inquiries or credit pulls.
The first type is often called a “hard pull.” This is when you go to a dealership, a bank, or similar institution and agreed to run your credit to see if you qualify for a loan. These must be done with your permission and you have actively sought this out. This type of pull usually lowers your score a point or two.
If a company does a hard inquiry without your knowledge, this is highly illegal and you should take action.
In this situation, we are concerned with the second type, “soft pulls.” Sometimes, this is called an account review. A soft pull is only visible to you, the company that pulled it, and the credit bureau.
For example, if you have a Discover account and Discover does a monthly account review, another company will not be able to see this.
If you have settled your Capital One, and you have no other accounts with them and you are seeing account reviews from Capital One on your credit report?
This is a warning sign. There is no account for them to review. They have no reason to pull your credit reports.
Is this illegal? Yes.
You have two options.
- Sue Capital One
- Dispute through the credit bureaus
If this is an improper credit pull, it should be deleted. It doesn’t matter if it is only a soft pull.
Someone is pulling your credit report and they have no right to do that. They should not be doing this and they need to be held accountable.
I once heard the following example used at a seminar in New York:
If the defense lawyer says, “Judge, it’s no big deal. Who cares?”
The lawyer for the consumer asks, “Hey, do you have your wallet with you? Put it on the table”
The defense lawyer refuses.
The consumer lawyer asks again and the judge grants permission. The defense places his wallet on the table.
The lawyer for the consumer then asks him to open it up to show his cards, photos, cash, etc.
“I don’t want to do that, that is my private information.” Realization sets in.
Even if it doesn’t hurt anybody, I don’t have the right to stop random people on the street and ask them to show me what’s in their wallet.
I don’t have the right to walk into my neighbor’s house and rummage through their files just to see what’s there.
When you end your relationship with Capital One, they no longer have any right to pull your credit reports.
If you see this happen, get with a lawyer who is familiar and experienced with suing the credit bureaus and creditors. They can help you decide the best course of action.
If you have closed out an account with a creditor by any means, they should no longer be pulling your credit.
This is yet another reason you should pull your credit reports weekly.
There may be something you need to act on.
We hope this is helpful to you!
If you live in Alabama and you have any questions, feel free to get in touch with us.
We would be glad to help you in any way we can.
You can reach us by phone at 1-205-879-2447, or you can fill out a contact form and we will get in touch with you quickly.
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