By Ashley Gower
Jul 2, 2024Whether you’re pre-approved for a mortgage or just closed the deal, excitement is likely swirling! However, amidst the joy, you might encounter an unexpected annoyance: an endlessly ringing phone, and a pile of unsolicited offers for other lenders, credit cards and insurance. In this blog post, we explain why this happens during your mortgage transaction and how to avoid the hassle of trigger leads and added pre-screened credit offers altogether!
What are Trigger Leads and Pre-Screened Offers?
The culprit behind this onslaught of mail and phone calls is a practice known as trigger leads. When you formally apply for credit or financing, like a mortgage, the lender you’re working with pulls your credit report and it’s considered a “hard inquiry“. While a hard inquiry is necessary to understand your true credit history and important credit information relevant to your home loan, it also simultaneously “triggers” a signal to other financial institutions that you’re looking for new credit (i.e. a loan).
Those companies can then purchase relevant data from credit bureaus like Equifax, Experian, and TransUnion and send out marketing to generate business in the form of pre-screened credit offers…thus, mail avalanche!
Guard Yourself from Scams
Many times, lenders who purchase these leads, won’t bother sending out mail and will directly call you as soon as they have your contact info in hand. The number is usually masked to look like it is coming rom your local zip code, but can be from anywhere in the country.
We’ve heard too many stories of sketchy lenders who have tried to trick a client into thinking they work with your existing lender. They may say “I’m working with your loan officer, we missed some important loan information, can I get your date of birth and your Social Security Number again?” Or “can you upload your documents into this online portal instead?”
These are terribly unethical business practices and we want you to be aware and take action before it happens to you!
Are Trigger Leads Legal?
Yes, trigger leads are legal. Under the Fair Credit Reporting Act, they are legal in all 50 states, as long as the company that’s buying the trigger leads meets certain requirements.
If you’re thinking, “How is this legal?” 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 believe it gives you more buying power by presenting competing offers upfront and giving you additional offers to compare.
While the intention might be positive, the constant barrage of unsolicited offers can feel intrusive and inconvenient for most people.
So, what should you do?!
How to Opt-Out of Trigger Leads
The good news is that everyone has options to fight back against this unwanted marketing, and it only takes a few minutes to complete! The sooner you act, the less unwanted mail you’ll be subject to. Here are three key resources to help you easily reduce or eliminate the junk mail and calls initiated by trigger leads:
OptOutPrescreen:
What it does: OptOutPrescreen allows you to opt-out of receiving pre-screened credit and insurance offers for five years, or permanently.
- How to use it: Visit www.optoutprescreen.com/ or call 1-888-5-OPT-OUT (1-888-567-8688).
- Cost: Free
- Lead time: Can take up to five days to become effective.
National Do Not Call Registry:
- What it does: This registry allows you to register your phone number to reduce telemarketing calls.
- How to use it: Visit www.donotcall.gov/ or call 1-888-382-1222.
- Cost: Free
- Lead time: Takes about 31 days to become effective.
Direct Marketing Association (DMA) Mail Preference Service:
- What it does: DMA allows you to choose which catalogs, magazine offers, and other mail you want to receive.
- How to use it: Visit www.dmachoice.org/
- Cost: $4 processing fee for personal mail (free for deceased individuals or dependents).
- Lead time: Registration lasts for 10 years, but effective dates may vary.
Will Opting Out Stop All Unwanted Pre-Screened Offers?
While these methods can significantly reduce the amount of unwanted marketing you receive, it’s important to remember they might not stop it entirely. Some companies may still contact you based on other public information they can access. However, taking just a few minutes to opt-out will be well worth the effort!
It can take up to 6 weeks for the process to take full effect, so get ahead of it if you can. If you’re still getting junk mail after that timeframe, be persistent! Write “Refused: Return to Sender” on unopened mail and send it back. You can also file a formal complaint with the company directly.
More Tips to Avoid Pre-Screened Credit Offers:
- Opting out early is key! The sooner you take action, the less junk mail you’ll receive. This whole process only takes a couple of minutes!
- Do this for everyone involved in your loan. If you have a co-borrower or cosigner on your loan, they should also opt out for maximum effectiveness.
- Keep an eye on your credit report. It’s always a good idea to monitor your credit report (not just your credit score) yearly for any suspicious activity. You can access your free credit report once a year from each of the three major credit bureaus: Equifax, Experian, and TransUnion. This is not a hard pull on your credit, so no new trigger leads will occur.
Feeling overwhelmed or have questions?
Don’t worry, we’re here to help!
We’re here to be a trusted resource for all your home loan needs. Our team can help you understand credit reports, trigger leads, and how to achieve a stress-free homebuying experience. Contact us today to learn more!
These blogs are for informational purposes only. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Should you have any questions about the information provided, please contact us.