Looking to get a mortgage, refinance, or even buy a car?
DON'T! - until you read this diary. The credit reporting bureaus have a pratice that fattens their wallets and makes your life a nightmare.
Follow me over the jump, for the sordid tale of the "trigger lead."
Whenever you shop for a mortgage, home equity loan, or even a car loan, the company you're talking with will ask for permission to "pull your credit"- get a credit report from one or more of the major credit reporting bureaus: Experian, TransUnion, Equifax and the newer Innovis. This is perfectly normal. After all, if someone walked in off the street and asked for hundreds of thousands of dollars, you would want to know what sort of financial shape they were in, and their history of paying off debt.
The first sign of something "not quite right" comes a couple of days later. Suddenly, your mailbox and/or email inbox is flooded with loan offers from companies you've never heard of. If you haven't registered with the "Do Not Call" list, your phone will be ringing off the hook, day and night, with unsolicited loan offers.
Your first thought is that the lender you talked to has violated their "privacy policy" and sold your info. That first thought would be wrong. After all, WHY would they sell your info to their competitors? The guilty party(ies) in this case are the credit reporting bureaus.
These are for-profit companies that make money by supplying your credit history to businesses. (One long-standing complaint is that since it costs them money to correct errors on your credit report, they are loath to do so.) Someone in the business had the bright idea for a new revenue stream: They'd take all the requests for credit reports (which they charge to provide), sort the subjects by various criteria, then SELL the information along with the type of loan being sought to any who would pay. This is known in the business as a "trigger lead."
This is done without your knowledge or permission.
When someone requests a credit report on you, your credit score, type of loan being requested, and personal information is matched to profiles of desired sales leads that various (mostly disreputable) companies have filed with the reporting bureau. Your information is then bundled and sold as a sales lead to these companies. Of course, the company where you were inquiring about a loan isn't happy, since they paid for a credit report which is then sold to their competitors. YOU aren't happy, because you're flooded with calls and mail from every boiler room lender in the country.
But, public pressure and threatened government oversight/regulation has provided an "out". The credit bureaus have initiated an "opt out" program where you can stop the sale of your personal information to third parties. The website, www.optoutprescreen.com, is the portal to a database that all credit reporting bureaus must use to "scrub" any trigger leads that they sell. Filling out the web form gets you off the list for five years. Printing out and mailing in the "hard copy" opt-out form gets you out of the system permanently.
PLEASE NOTE: It takes five business days to be "opted out", so wait at least a week after submitting your name for removal before applying for a loan, or shopping interest rates.
(This diary based on an article I wrote for my real estate newsletter, "House Talk.")