Why do lenders ask for my Social Security Number?
Updated: Aug 19, 2022
Lenders need your SSN to verify that your information is correct and prevent loan fraud.
Firstly, they use your SSN when they conduct a “soft” credit inquiry to check that the
information provided by your credit bureau is correct. And suppose you decide to submit a loan application officially. In that case, you’ll be asked to provide your SSN a second time for them to conduct a “hard” credit inquiry and finalize your application. In some cases, lenders match the credit reports with the SSN you provided to verify that this is the same person and that the credit information is accurate. Because your credit history reflects your financial reliability and, consequently, which loan options you can qualify for, your SSN is a crucial part of the loan application process.
To prevent fraud, Lenders ask for your SSN to verify that you are you and not a scammer in disguise. Before making a loan offer, they will scour through your credit report for discrepancies or inconsistencies. If for any reason, you feel that there’s a risk with providing your SSN, you can check with the Better Business Bureau’s scam tracker tool. They list websites, keywords, and phone numbers that have been tied to cases of identity theft and fraud.