Adding a soft-pull check to your funding intake

Qualifying a lead before the first call is a sound way to run intake. Your reps spend their hours on people who can use the product, your clients meet fewer dead ends, and nobody is surprised on the third call. The hard part isn’t the technology. It is doing it in a way you could explain to a skeptical stranger, which, sooner or later, someone may ask you to do.

Start with who you may check

The Fair Credit Reporting Act lists the reasons a consumer report may be furnished, and it’s a closed list. Two of the reasons matter most for funding. One is when the report is requested “in accordance with the written instructions of the consumer to whom it relates.” The other is when the person using it “intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer.” Whether a business funding decision fits that second reason can depend on whether the person is personally on the hook, so ask your counsel.

That gives you a clean way to sort every lead you hold.

• People who asked. Someone who filled in your form, answered your ad, or has asked you about funding started the request. A statement at the point where they asked, plus their written instructions, is the sensible record.
• People on the phone with no consent captured yet. They asked, but you’ve nothing in writing. Get it in writing before any check, which is the subject of its own article.
• People who didn’t ask. A purchased list, a bulk prescreen, marketing you started. These follow different rules: the FCRA allows the person’s own authorization or, for a lender, a firm offer of credit with an opt-out. Do not check them by default, and talk to your counsel first.

What the consent should look like

We ask every agency that works with us to show four things on its own website, and we check them. They are a sound checklist whether or not you work with us.

1. A statement beside your button. One sentence, close to the button or link people press, saying that a review of their consumer report may be performed and that it does not affect their credit score. We don’t require a checkbox, and we wouldn’t pre-tick one.
2. A Specific Consents paragraph in your Terms, near the top, saying the person is giving written instructions under the Fair Credit Reporting Act, that you and your associates may obtain the information, and that you are not a lender.
3. Credit lines in your Privacy Policy: what you obtain, that you use it only for the funding they asked about, that you don’t sell it, and how to ask for deletion.
4. A line naming FundingRange as a service provider, with a link to our Terms, so the person can see who else handles the request.

None of it is clever. Plain words, in the spot where the person is deciding, do the work. The wording is in a paste-ready kit in your Compliance center, filled in with your business name. Take it to your own counsel if you like, and change the layout to fit your site. Keep the meaning.

What to store

A consent you can’t show is a consent you don’t have. For every person you check, keep the time, the exact words they were shown, which version of those words it was, and where the agreement came from. Store it where it can’t be quietly rewritten. We chain every record to the one before it, so that a change after the fact leaves a visible break. Whatever you use, make the record boring and durable.

What to do with the result

A funding range is an estimate. It is not an offer, an approval or a promise of terms, and the sentence you say to the person should not suggest otherwise.

The other obligation arrives when you act on what a report says. The Federal Trade Commission’s guidance, written for consumer credit, says that if you take adverse action against a consumer based on information in a consumer report, you must tell the consumer, and that the most common adverse action is a denial of credit. How that applies to business funding depends on the facts. If you or a partner decline someone using a consumer report, ask your counsel what notice applies and who sends it.

Where to start tomorrow

Pick the one page where people ask you for funding. Put the statement beside the button. Check that your Terms and Privacy pages carry their lines, and that FundingRange is named as a provider. Then try it on yourself, with your own information, and read what the person on the other side would read. If you work with FundingRange, we run that check when you apply.

To see what the person on the other end experiences, read what a soft pull does and does not do.