If you’ve recently applied for a loan or mortgage, you may have noticed an increase in unsolicited loan, mortgage or prescreened credit offers coming your way. This influx of offers can be confusing and might leave you wondering how your information became available for these promotions. Understanding why these offers appear can help clarify the process and give you options for managing your information.
Prescreened lists and credit inquiries
When you apply for a loan or mortgage, the lender typically checks your credit report. During this process, credit bureaus are notified that you’ve recently sought credit, which can lead to a rise in unsolicited offers. Here’s how it works:
- Credit bureaus share lists- credit bureaus maintain lists of consumers who meet certain criteria set by companies offering credit or insurance. After a credit inquiry, credit bureaus may include your information in one of these lists, allowing lenders and insurers to reach out with targeted offers based off your credit profile.
- Trigger lists- similar to credit bureaus sharing and maintaining their own lists, some lenders and financial institutions use what’s called a “trigger list.” When a credit bureau receives a new credit inquiry, it adds the applicant’s information to a list, signaling that the applicant may be open to new credit offers. These trigger lists can be purchased by other lenders who might wish to offer you their own rates or products.
Why companies send these offers
Companies sending unsolicited offers after you apply for a loan are betting that you may need additional financial products or competitive rates. Their goals may include:
- Competing for your business – many companies seek to win over customers with recent credit inquiries by offering lower interest rates, better terms or unique benefits.
- Providing supplementary products – once you’ve taken on a new loan or mortgage, lenders may assume that additional products, such as home or auto insurance, lines of credit or even credit cards may be relevant to you.
- Building customer relationships – some companies view these offers as a way to initiate a relationship with potential customers. By presenting you with their products now, they’re aiming to earn your loyalty and encourage you to use their services in the future.
Managing these offers
If you find the influx of offers bothersome, you do have control over how your information is used:
- Opting out of prescreened offers – the credit reporting agencies offer an opt-out service, allowing you to limit the unsolicited offers you receive.
- Adding your name to the National Do Not Call Registry: The Do Not Call Registry won’t prevent all unsolicited offers, but it can help minimize phone-based promotions. You can register your phone number on their website.
Receiving unsolicited loan, mortgage or credit offers after applying for financing is often due to prescreened lists or trigger lists created by credit bureaus. While these offers can be beneficial by introducing competitive options, they can also be managed through opt-out services. By understanding why you receive these offers, you can take steps to control your information while making well-informed financial decisions.
For questions or to learn more about prescreened offers, reach out to Minnwest Bank.
