After a long day at work or returning from a vacation, you find your mailbox filled with credit card offers. Does this sound familiar? If so, you’re not alone.
Billions of credit card offers are sent to American consumers each year. Many people simply throw away or shred these offers, but if you want to significantly reduce or eliminate them, there is a more effective way.
How Pre-Screening Works
For decades, the credit card industry and other sectors have used a method called pre-screening to attract new customers. Pre-screening involves credit card issuers providing selection criteria to credit bureaus, which then compile a list of consumers who meet these criteria and share their names and addresses with the issuers.
If you meet the issuer’s criteria and your information is shared, you’ve been pre-screened.
Let’s clear up some common misconceptions about pre-screening:
- Legality: As long as the issuer offers reliable credit to the listed consumers, pre-screening is entirely legal, with few exceptions.
- Privacy: Issuers don’t access your credit report or credit score, only your name and address.
- Mail Processing: Issuers don’t handle your name and address directly; these are typically sent to a mailing center for bulk processing.
When your information is shared, the credit bureau posts a soft inquiry on your credit report. You’ll see these as pre-screening inquiries, promotional inquiries, or pre-approval inquiries, which don’t affect your credit score and are only visible to you.
Criteria for Issuer Evaluation
As part of the pre-screening process, issuers provide credit bureaus with selection criteria that consumers must meet. If you don’t meet these criteria, your name isn’t included in the pre-screening list, and you won’t receive the offer or see a pre-screening inquiry on your credit report.
An example of basic selection criteria might be:
- FICO score above 640
- No bankruptcies in the past four years
- No late payments in the past 36 months
- No more than three credit card accounts with balances
- No credit card collections
The actual criteria are often more complex, but this gives you an idea of how the process works.
How to Opt-Out of Pre-Screening
If you don’t want to receive credit card offers, you can control the process and opt-out. By opting out, you prevent credit reporting agencies from including your name in the lists they sell to credit card issuers, home equity lenders, insurance companies, and other pre-screening entities.
Important Notes on Opting Out
- Time to Take Effect: Opting out doesn’t immediately stop all credit card offers. The process can take a few weeks to fully filter through the credit reporting system, and you may still receive offers that were already in the pipeline.
- Ongoing Mail: Opting out only stops pre-approved offers. It doesn’t stop issuers from sending invitations to apply (ITAs), which are not based on pre-screened lists and can still be sent to you.
- Your Rights: You have the right to opt-out of pre-approved credit card offers. This action prevents credit reporting agencies from sharing your information in pre-screening lists sold to issuers.
Conclusion
A mailbox full of credit card offers indicates that you’ve met the issuer’s screening criteria. While pre-screening ensures that issuers must provide a “firm offer of credit” as per the FCRA, you can choose to opt-out if you find the process intrusive.
