A “prescreened” offer of credit? What’s that?
Many companies, such as auto, life, health insurance companies, solicit new credit card accounts and insurance policies by using prescreening to identify potential targeted customers for the products they have to offer. These prescreened offers or “pre-approved” offers are based on information that is on your credit report, which indicates and prequalify you to meet criteria set by the offeror. Usually, prescreened solicitations come via mail, but you also may get them in a phone call or in a form of “junk” email.
How does prescreening work?
Prescreening works in one of two ways:
- a creditor or insurer establishes criteria, like a minimum credit score, and asks a consumer reporting company for a list of people in the company’s database who meet the criteria; or
- a creditor or insurer provides a list of potential customers to a consumer reporting company and asks the company to identify people on the list who meet certain criteria.
Can prescreening hurt my credit report or credit score?
No. There will be “inquiries” on your credit report showing which companies obtained your information for prescreening, but those inquiries will not have a negative effect on your credit report or credit score.
Can I reduce the number of unsolicited credit and insurance offers I get?
If you decide that you don’t want to receive prescreened offers of credit and insurance, you have two choices: You can opt out of receiving them for five years or opt out of receiving them permanently.
To opt out for five years: Call toll-free 1-888-5-OPT-OUT (1-888-567-8688) or visit www.optoutprescreen.com. The phone number and website are operated by the major consumer reporting companies.
To opt out permanently: You may begin the permanent Opt-Out process online at www.optoutprescreen.com. To complete your request, you must return the signed Permanent Opt-Out Election form, which will be provided after you initiate your online request.
When you call or visit the website, you’ll be asked to provide certain personal information, including your home telephone number, name, Social Security number, and date of birth. The information you provide is confidential and will be used only to process your request to opt out.
If you don’t have access to the Internet, you may send a written request to permanently opt out to each of the major consumer reporting companies. Make sure your request includes your home telephone number, name, Social Security number, and date of birth.
Why would someone opt out — or not?
Some people do not like receiving such deals in the mail, especially if they are not considering or in finding a new credit card or insurance. They may be more willing to opt out of obtaining credit and insurance advice for limiting their credit reporting information, or to reduce some “mess” with their mailboxes. However, the information sent by some companies is not based on pre-screening, and your federal exit does not prevent such requests.
If you think about exiting, you should know that pre-arranged offers can provide many offers, especially if you’re in a credit card or insurance market. Prescreened offers to help you understand the services available, compare costs, and find the best products for your needs. Since you have pre-selected to accept the offer, it can only be rejected in limited circumstances. Pre-screened terms may also be more favorable than publicly available terms. In fact, some credit cards or insurance products can only be provided through pre-screening services. Unsolicited, unscreened credit or insurance quotes based on information in the credit report should be easier to spot.
New regulations from the Federal Trade Commission now require notices to prominently display with required information, such as the toll-free number (1-888-5OPTOUT or 1-888-567-8688) to opt-out. Now, this number, along with a statement on the site that you can stop the unsolicited offers, must appear – in at least 12-point type – on the first page of the offering site. In addition, this “short” notice should refer you to a more detailed notice elsewhere in the offer.
Will any unsolicited credit and insurance be stopped at 1-888-5-OPTOUT or at www.optoutprescreen.com?
By calling the opt-out line or visiting the website, it will stop the pre-screening solicitation based on the list of major consumer reporting companies. You can continue to receive credit and insurance coverage based on lists from other sources. For example, exiting does not end the solicitation of local traders, religious and charitable associations, professional and alumni associations, and companies that you already do. To block mail from such organizations – and mail addressed to “occupants” or “residents” – you must contact each source directly.
The revised notice is the requirement of the “Fair and Honest Credit Transaction Law” of 2003, and the “Fair Credit Reporting Law” was revised. The new law instructs the FTC to make laws that make advance notice easy to understand. Some changes have been made to address some of the consumer concerns. Although the credit and insurance industries quickly pointed out the benefits of receiving unsolicited offers, we the consumers expressed some objections, including:
- An increase in unwanted mail.
- Confusion about how one’s name ended up on a marketing list.
- Access to credit reports not authorized by the consumer.
- Risk of identity theft when unsolicited offers are stolen from the mail.
Creditors or insurers may ask the credit bureau for a list of consumers that meet certain criteria, such as a minimum credit score.
Creditors or insurers can submit a list to the credit bureau to screen for consumers who meet certain criteria.
The result of this screening process should be “firm”. However, this does not mean that the offer is guaranteed. Any quote you receive should explain this and state any additional conditions, such as the need for collateral.
Here are some basic facts about pre-screening offers and exiting:
Inquire about pre-screened offers will not affect your credit score.
Free opt-out phone number (1-888-5-OPTOUT or 1-888-567-8688) is the phone number for the three national credit bureaus – Experian, TransUnion, and Equifax. You do not need to be separate from the three bouts.
You can choose five years or permanent.
Even if you quit, you can choose to resume offers. Rejoin does not affect your credit score.
For more information on the FTC’s new advance notice, see:
For more options for opt-out, see Fact Sheet 1a, Privacy Basics and Opt-out Strategies from privacyrights.org with the following URL: https://www.privacyrights.org/fs/fs1a-basics.htm.
Stop unsolicited commercial mail
The Direct Mail Association (DMA) Mail Preference Service (MPS) allows you to choose not to receive unsolicited commercial mail from multiple domestic companies in five years. When you register with this service, your name will be placed in their “delete” file and will be available notifying direct mail to marketers and organizations to halt their mailing to you. This should diminish your bulk of the unsolicited mailings. However, your registration does not stop messages from organizations that do not use DMA’s mail preference service. To register using DMA’s mail preference service, go to towww.dmachoice.org or mail your request for a $ 1 fee to:
Direct marketing association
PO Box 643
Carmel, NY 10512
DMA also has eMPS, which helps you reduce unsolicited commercial e-mail. To opt for unsolicited commercial e-mail that does not receive DMA membership, visit www.dmachoice.org. Free registration six years.
Unsolicited pre-screened credit or insurance frequently asked questions
By choosing to Opt-Out, Will it hurt my credit score?
Removing your name from a pre-screened list will not affect your ability to apply or receive credit or insurance.
If I decide to quit, how long before I stop getting pre-screened offers?
Requests to quit are processed within five days, but it may take 60 days to stop receiving pre-screened offers.
What if I choose to quit and change my mind?
You can rejoin using the same toll-free number or website.
Should I know what else to opt out of the program?
The federal government’s state does not call phone registration is a free, easy way to reduce your phone marketing calls at home. To register your phone number or to get information on the registration form, visit www.donotcall.gov, or call 1-888-382-1222 at the number you want to register. You will receive fewer phone marketing calls within 31 days of the registration number. The phone number on the registry is only deleted when it is disconnected and reassigned, or if you choose to delete the number from the registry.