How "Pre-approved" Credit Offers Can Drive Your Credit Score Down

Along with improving your credit score comes the curse of an avalanche of tempting credit card offers. Every other day, you can expect to find that you've been "pre-approved" or "pre-selected" to apply.

You may wonder, "How do they know I should be pre-approved?" After all, most of these are companies with which you have never traded. How did they covertly uncover enough information about you to pre-approve you for thousands of dollars?

Well, one of the primary cash cows for the credit reporting agencies is the rental of mailing lists. The lender gave the credit bureau criteria; usually a desired range of credit score, and the bureau ran a query using those criteria against its consumer database. That's where you came in. You simply fell within the parameters of the profile along with thousands of others.

Being pre-approved means nothing. They will still verify employment and income. They will still pull your credit history, even though you were 'pre-approved' based on your history. Yes, be aware that when you respond to one of these offers, you are authorizing the lender to actually pull a copy of your credit report from one of these credit bureaus. Each time someone makes an inquiry into your credit file, your credit score goes down. And lenders do not like to see more than a couple of inquiries within a six-month period. That alone is enough to reject a borderline loan application.

If you would like to simply remove this temptation, you can. You have the right to stop your name from being included in this compiled list. You can opt out for two years or permanently, or opt yourself back in by calling 888-5-OPT-OUT (888-567-8688). This one number will allow you to remove yourself from all four credit bureaus with one action. Or you can write the bureaus directly at the following addresses:

• Trans Union
  Name Removal Opt-Out Request
  P.O. Box 97328
  Jackson, MS 39288
  
  
• Equifax Options
  P.O. Box 740123
  Atlanta, GA 30374-0123
  
  
• Experian Marketing
  P.O. Box 919
  Allen, TX 75013