While the snail mail and email many of us receive heralding pre-screened offers from credit card companies and life insurance providers look similar at first glance, there are some key differences between them that’s important to understand.
Credit card issuers and others are able to glean information from credit reporting agencies to make offers to those whose credit histories meet guidelines selected by the card company, notes the Consumer Financial Protection Bureau. This doesn’t mean, however, that companies must provide you with a credit card or insurance policy when they send an offer your way. You are still required to apply and move through the approval process.
What’s the difference?
It’s important to read the description included on your offer to understand how likely you will be to actually receive the deal that’s being extended. Check out the front and back of the envelope and also the back of the letter, down near the bottom, for the fine print. Generally, a pre-qualified offer is a less-rigorous evaluation and is initiated by the consumer, and a pre-approved offer is a more rigorous evaluation of how likely you will be to ultimately qualify for the rate or product in question.
Why we get pre-screened offers
Lenders and insurance companies determine what it takes for people to qualify for their products, according to the Federal Trade Commission, then they ask the major credit bureaus, such as Equifax, Experian and Transunion, to give them a list from their databases of those whose credit reports show they meet those requirements. They also might give the credit bureau a list of potential customers and ask them to identity the people who meet their requirements, notes the FTC. That means the pre-screened offers generally land in your mail or email box based on information in your credit reports, including borrowing history and credit score.
How to opt out of pre-screened offers
You have a few choices when it comes to not receiving pre-screened offers. To opt out, you can choose not to receive offers for five years or permanently. To opt out for five years, go to optoutprescreen.com or call 1-888-5-OPT-OUT (1-888-567-8688). To opt out permanently, visit optoutprescreen.com or call 1-888-5-OPT-OUT (1-888-567-8688) to start the process. To complete your request, you will need to sign and return a permanent opt-out election form (which you can get online) once you’ve started the process. When you call or visit optoutprescreen.com, they’ll ask for your personal information, including your name, address, Social Security number, and date of birth. The information you give is confidential and will be used only to process your request to opt out.
How to opt out for your children
While credit bureaus don’t keep credit files on minor children, if you suspect your child’s information has been used fraudulently, you can submit an opt-out request for them. To do that, send a written request to each of the major credit bureaus. Your letter needs to include your child’s full name, address, and date of birth. Also include a copy of their birth certificate, Social Security card, a copy of your driver’s license or other government-issued proof of identity.
Why should you keep the offers coming
There are times when you may want to see what types of credit offers financial institutions and credit card issuers are willing to send your way. If you are in the market for a new credit card, auto loan, or a better rate on your insurance, the offers can provide insight into what’s available, help you compare costs, and maybe even assist in finding the best products for your situation. Another plus is that the terms of pre-screened offers may be better than those given to the general public.
There’s an app for that
In recent years, financial institutions have begun using a more targeted way to make select offers available to customers of specific types of accounts through their apps. If you have an app for your credit union or bank, there’s likely a button or line that says “special officers.” Click it to see what products you may qualify for without ever walking out to your mailbox. Don’t forget to check out pre-qualified offers the next time you log in to the SavvyMoney credit score tool as well.
With reporting by Casandra Andrews