If you’ve ever applied for a mortgage, credit card or had a hard credit inquiry, you’ve probably experienced other lenders or financial service providers harassing you with unsolicited phone calls or emails.
So, when you apply for a mortgage, your credit report is pulled from the three major credit bureaus: Equifax, Experian and TransUnion.
The bureaus record this action, and within 24 hours your information is placed on a list that is now for sale, creating a “trigger lead.”
A “Trigger Lead”?
Unbelievably, this list is then sold to creditors who might contact you with various unsolicited offers for credit or other financial products. More often than not, they are bothersome, inconvenient, and in many cases, rude.
It sure feels like an invasion of privacy when other creditors contact you and seem to know you’ve applied for credit – not to mention that unsolicited phone calls, emails, and junk mail are downright annoying.
Believe or not, these entities that have access to your personal and financial information are legally allowed to sell your information to other lenders who pay these bureaus for this information.
Are Trigger Leads Even Legal?
Yes, trigger leads are, in fact, legal. Under the Fair Credit Reporting Act, as long as the company that’s buying the trigger leads meets certain legal requirements, they are legal in all 50 states.
Understand that trigger leads are a big business for the credit bureaus, like Experian and Equifax.
If you’re thinking, “How is can this be?,” here’s the logic for it.
The Federal Trade Commission (FTC) and Consumer Finance Protection Bureau (CFPB) actually encourage this type of competition among lenders because they think it gives the prospective borrower a better chance of getting the best possible deal for financing.
So, while trigger leads are frustrating and severely intrusive, they are considered legal. And they’re designed to be for consumers’ benefit, even though it doesn’t doesn’t end up being that way.
Opting Out
The good news is that you can opt-out to reduce the number of solicitations you receive. It’s recommended to opt-out before applying for a loan, credit card or insurance.
Online — Visit OptOutPrescreen.com. To process your request, you’ll need to provide your Social Security number, date of birth and name. From here, you’ll find an option to opt-out of trigger leads for either a five-year period or permanently.
Via Phone — Call 1-888-5-OPT-OUT. It usually takes around five business days to process an opt-out request, so make sure you allow enough time between opting out and submitting an application. Also, it can take up to a couple of months to stop receiving pre-screened offers altogether. This is due to some companies buying your information prior to you opting out.
Your Privacy Matters
As your mortgage lender, I take your privacy seriously and make every effort to ensure your information is secure.
If you plan to apply for a mortgage any time in the future, I encourage you to opt out in advance so you can prevent the calls from coming in the first place.
I also encourage you to call your congressperson and senator…and tell them to have this practice outlawed.
If you’d like to find out more…or strategize with me on how to work around this system, don’t hesitate to reach out to me!
The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.
