Did you fear that you were the victim of identity theft when you read your credit report and saw the name CREDCO? What is CREDCO, and why is it on your credit report? Why did it trigger a hard inquiry?
This is your guide to Credco — what it is, what it does, and why it shows up on your credit report.
Credco LLC is the consumer credit information division of CoreLogic Inc. CoreLogic is an information intelligence operation steeped in analytics. At its core is the mining and analysis of data by a team of computer scientists and economists. The company helps its global clients spot opportunities for financial growth. It also uses data to instruct businesses on how to mitigate risk.
CREDCO has become the primary source for merged credit reports in the United States. Previously, lenders had to wade through the individual reports provided by a credit reporting agency such as Experian, Equifax, or TransUnion. CREDCO, over the past few decades, has become a popular middleman and consolidator of consumer information. It combines the three reports into one comprehensive product, often referred to as a three-bureau merged credit report.
However, it’s not correct to say that CREDCO merges credit scores. The company makes a point of emphasizing that it never merges scores. Instead, it weaves together the three bureau reports. In the process, it eliminates unnecessary duplication.
If you’ve ever compared credit reports from each of the three bureaus, you no doubt noticed that most of your credit history appears on each of the three reports. Once CREDCO’s technology deletes the duplicates, it regroups the unique entries and presents them in an easy-to-read format for CREDCO’s clientele.
Mortgage lenders and auto lenders are steady customers of CoreLogic CREDCO. So, if you recently applied for a pre-qual on a mortgage for example, you will likely see the CREDCO on your credit report rather than one or more of the three consumer reporting agencies—Experian, Equifax, and Transunion.
CoreLogic’s hard inquiry is called the Instant Merge. According to CoreLogic, 19 of the 20 top mortgage companies use Instant Merge. The company also says that more than 60 loan origination systems incorporate it.
If any items on the Instant Merge require additional information, CREDCO provides a supplemental report called Merge Plus that will shed light on up to three specific entries. The company also offers a Mortgage Only Credit Report, also called the Verification of Mortgage, that catalogs a person’s history of mortgage payments, his balance, and his history of late payments.
CoreLogic’s soft inquiries are the Instant Merge PreQual and the Instant Merge SoftTouch.
A hard inquiry refers to the credit check that your bank or other potential lender conducts when you apply for a loan. Loan applications in the mortgage industry account for a large percentage of hard inquiries, as do auto loans. Usually, you have to authorize a hard inquiry by signing the proper paperwork at the time of your loan request. You will also hear hard inquiries referred to as hard credit checks and hard pulls.
Hard inquiries can adversely affect your credit score, which is why you want to avoid having several hard inquiries within a brief span of time. If you apply for several personal loans or credit cards, it may appear that, as a borrower, you have a serious but hidden financial problem that you’re trying to fix. Naturally, potential lenders will shy away from granting loans and credit cards after noticing the suspicious behavior.
A similar problem arises when you need several hard inquires to make the best decision regarding a major purchase such as a home or auto. Your FICO score won’t factor in your hard inquiries for the first 30 days. You can use that time to your advantage by narrowing your search for a loan and then applying to the most suitable lenders.
Hard inquiries can linger on your credit reports for around two years. Fortunately, if you have outstanding credit, the effect is minimized if you only have a few hard inquiries. Your report will note that hard inquiries took place, but that notation doesn’t automatically mean that your credit status has been notably lowered.
A soft inquiry is usually a check performed by a lender who wants to invite you to apply for a loan. Generally, when you receive those prequalified offers in the mail for loans and credit cards, a soft inquiry has taken place before your name was added to that mailing list.
Sometimes soft inquiries show up on your credit report, but they do not affect your score. An example of a soft inquiry is when you check your credit score. Another example is the background check a potential employer may perform.
Because CREDCO supplies consumer credit reports, it has to abide by FCRA regulations, which stipulate that consumer credit information can only be made available to parties with purposes listed by the FCRA. The company also is compliant with the Fair and Accurate Credit Transaction Act (FACT Act), which mandates protection against identity fraud. It also increases the consumer’s ability to gain access to his consumer reports and correct any inaccuracies he finds.
At this point, CREDCO shouldn’t seem as mysterious and ominous as it did before. You know that it’s an expert data company that takes the reports of the three top national credit bureaus and merges them into one comprehensive report for lenders.
So now you understand why the name CREDCO so frequently appears on credit reports. Your bank, auto dealer, or landlord may have asked you to sign an authorization form that permits hard inquiry credit checks. If that lender uses CREDCO’s credit service, then CREDCO will rightly appear on your credit report as the company responsible for the hard inquiry.
CREDCO is like everything else connected to credit. It isn’t as difficult to understand as one might at first think. Our blog tackles many other subjects that often intimidate consumers. However, just like with CREDCO, you'll find that you can easily comprehend them as well. For more information on credit and credit reports, check out our comprehensive credit guide.
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