Credit Myths: The Opt-Out Myth
What is the OPT-OUT Myth?
The myth regarding opting out is that if you opt-out of receiving pre-screened credit offers your score will go up.
The reasoning behind this comes from a misconception that soft inquiries on the report can hurt your credit score. In other words, don’t worry. Opting out does nothing to your credit score.
What are preliminary offers?
Pre-screened credit card offers are preliminary offers of credit that can be sent to consumers who have a profile similar to what the bank is looking for. The banks find potential customers in pre-screened lists from agencies and send them an application if they meet certain criteria, such as having good or excellent payment history with other financial institutions already (a requisite not all applicants will necessarily possess).
A credit card issuer could request a list of consumers who have not opened new accounts recently and do not have any bankruptcies on their records, then sell this information to lenders. This way they can offer cards for those people with great scores!
One could argue that because the credit card issuer knows exactly which consumers are most likely to repay their debts, they can offer these individuals cards without worrying about someone else taking advantage of an opportunity. Plus there’s no need for long application processes or difficult financing decisions when you already know who will be approved!
Can Credit Reporting Agencies Legally Sell Your Information on Pre-Screened Lists?
Yes, it is completely legal for the credit reporting agencies to include your information on pre-screened lists of consumers. The practice has been around since 1977 and does not seem likely going anywhere anytime soon with all those lucrative revenue generating opportunities available at every turn!
When you sign up with them as well if they send out offers via mail– which happens quite frequently! You may already know that many banks buy lists from these companies every day because they want new consumers who will be interested paying off their debts quicker than usual through using cards wisely.
Do these “pre-screen” offers affect my credit score?
No. This is because the process of receiving this information generates a soft inquiry, not an actual request to access one’s personal records or other sensitive data related with them that could lead down some sketchy paths in terms of identity theft if accessed without permission; but it doesn’t matter as long as these requests come through formally and legally thanks for caring!
How Can I Remove Myself from these “pre-screen credit card offers”?
You have the right to order credit reporting agencies not to include your name on pre-screened lists that they sell. This is free and easy, just visit www.optoutprescreen.com for more information about opting out of these marketable privileges!
The only thing beneficial about opting out is simply receiving less “junk mail”.
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