Credit reporting agencies build your profile using a variety of quantitative and qualitative data. The agencies use a credit scoring model developed by Fair Isaac Corp., FICO, and provide these scores to help lenders ascertain the risk of default should they loan you money. FICO scores include weighted analysis of your payment history, the amounts you owe, length of credit history and types of credit used. According to the Federal Trade Commission, removing your name from prescreened lists, or "opting out," has no effect on your credit scores.
Prescreened Offers
The prescreening practice is authorized under the Fair Credit Reporting Act (FCRA). A prescreened credit offer indicates that the finance company has conducted research about you and deems you ideal for the offer. The finance company does not view individual credit reports to make these offers, but rather obtains a list of candidates for prescreened offers based on information from credit reporting agencies.
Opting Out
You have several options for opting out of prescreened offers. You can opt out for five years, or permanently, by calling 888-567-8688 or visiting OptOutPrescreen.com. These are the only opt-out choices jointly authorized by the major agencies: Equifax, Experian, Innovis and TransUnion. If you choose the permanent option, you will receive a "Permanent Opt-Out Selection" form, which you must mail to confirm your request in writing. You can also write to each agency to have your name permanently removed from prescreened lists. Although the service typically processes your request within five days, it may take up to 60 days for you to stop receiving offers.
Considerations
If you are not shopping for credit or insurance, prescreened offers can be annoying and can clutter your mailbox and email. These offers also can expose you to identity theft and invade your privacy, and if you accept the offers, you may be tempted to add to your debts. Conversely, if you are shopping for credit anyway, prescreened offers can help you select available products for which you are likely to receive approval. Insurers and lenders make these "firm" offers to you only if you meet certain criteria. They tailor their offers to your credit profile.
Opting In
The time may come when you want to begin shopping for credit again and wish to place your name back on the prescreened lists. If you previously opted out of prescreened offers, you can opt in again -- even if you opted out "permanently." Call the opt-out number, visit OptOutPrescreen.com or contact the credit reporting agencies. If you never opted out in the first place, you do not need to complete an opt-in request.
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