SterlingResidential.com | Buying & Selling Residential Properties in Texas | Houses for Rent Houston Area | Humble Atascocita Kingwood & Spring Texas Realtors | Sterling Residential®, Realtors® | Real Estate Broker: Prescreening Triggers Unsolicited Mortgage Offers

Ever wonder who is giving out your information when you apply for credit? The Federal Credit Reporting Act (FCRA) authorizes credit bureaus to provide credit applicant information to financial institutions in a process known as prescreening.

Prescreening is the process used to create consumer “trigger lists” based upon predetermined criteria selected by financial institutions. The predetermined criteria used may include zipcodes, credits scores, or other similar data useful in defining a financial institution’s target market. When you apply for credit, your information is checked against a company’s target market, and if there’s a match, you’re added to the list. The information match triggers the list, hence the name.

Homebuyers should know that when a lender pulls your credit history, your information can be accessed by other mortgage companies. Mortgage companies use trigger lists to contact mortgage applicants with “a firm offer of credit.” Under the FCRA, prescreened applicants must be offered credit, subject to further verification and disclosure of additional credit terms.

Like many consumers, you may have received offers from credit card companies. Unlike mortgage lending, credit card products and terms are similar and easily compared, so receiving unsolicted credit card offers doesn’t present many problems. Mortgage products, however, are harder to compare and credit approval is subject to underwriting guidelines making the mortgage lending process more complex. Given the complexity, lenders can’t make you a firm credit offer based on limted trigger list information.

Shortly after you’ve submitted your loan application and your name hits a trigger list, you could start receiving unsolicited mortgage offers. Those teaser-rate and easy-credit promises make unsolicited credit offers sound tempting, but the offers are subject to change once you submit your loan application and it’s reviewed by the underwriter. Unsolicited mortgage offers add confusion to the process and can delay your home purchase if you change lenders.

If you’ve done your mortgage shopping beforehand, the temptation to change lenders in the middle of the deal is reduced —- and is never advisable unless absolutely necessary. In a competitive situation, you could lose your dream house to a better prepeared buyer if you can’t get the deal closed on time.

If you’re concerned about unsolicited credit offers, you can stop them by opting out at OptOutPrescreen.com or by calling 1-888-5-OPTOUT (1-888-567-8688).

Read More About Prescreening and How to Opt Out

• FTC: What is Prescreening?
• OptOutPrescreen.com: How to Opt Out
• What does the Experian Say About Prescreening
• Fair Credit Reporting Act (FCRA) Information

John Huval, Broker Realtor® GRI e-Pro Copyright© 2006