Securing Credit Inquiries: How Real-Time User Approval Can Fight Identity Theft
Unauthorized credit checks are one of the gateways to identity theft. A new proposal could change how credit inquiries work.
The Current Problem
Today, credit inquiries often occur without a consumer’s direct awareness.
This creates opportunities for:
- Fraudulent applications
- Identity theft
- Credit score damage
A New Idea: Real-Time User Approval
Researchers suggest a user approval system where consumers must verify any inquiry before it proceeds.
Source: arXiv Preprint, May 2025
Think of it like two-factor authentication for credit pulls.
Benefits
- Reduces identity theft risk
- Empowers consumers with greater control
- Builds trust in the credit reporting system
Tradeoffs
- Slightly more friction for legitimate applications
- Technology integration required by lenders and bureaus
- Accessibility concerns for consumers without smartphones
Conclusion
Real-time approval could fundamentally shift how credit inquiries are managed.
If adopted, it would mark a major step forward in protecting consumers from identity fraud.