What Are Credit Trigger Leads? Understanding Them for Home Financing
If you’re looking for a home loan, you might hear about something called “credit trigger leads.” This guide will help you understand what they are, how you become one, how to opt-out, and why you should be careful.
What Are Credit Trigger Leads?
When you apply for a home loan, the lender checks your credit. This creates a record called a “hard inquiry” on your credit report. Credit bureaus like Experian, Equifax, and TransUnion collect these records and sell lists of people who recently applied for loans. These lists are called credit trigger leads. Other lenders buy these lists to offer you more loan options. As interest rates have risen over the past few years, and mortgage demand has decreased, credit trigger leads have become a viable source of new business for mortgage lenders.
How You Become a Credit Trigger Lead
- Applying for a Home Loan: When you apply for a home loan, the lender asks a credit bureau for your credit report.
- Hard Inquiry: This request shows up as a hard inquiry on your credit report, signaling that you are looking for a loan.
- Data Sale: Credit bureaus sell lists of these hard inquiries to other lenders.
- Lender Contact: You start getting a large volume of calls, emails, and letters from other lenders offering home loans.
How to Opt-Out of Becoming a Credit Trigger Lead
To stop becoming a credit trigger lead and reduce unwanted offers, you can:
- Opt-Out Prescreen: Visit OptOutPrescreen.com or call 1-888-5-OPT-OUT (1-888-567-8688) to opt-out for five years or permanently. This is the easiest way to opt-out of becoming a credit trigger lead.
- Credit Freezes: Freeze your credit reports with Experian, Equifax, and TransUnion. This stops new inquiries and the sale of your data. However, you must unfreeze your credit report, with all three bureaus, before an authorized hard inquiry can be completed.
- Direct Communication: Contact the credit bureaus directly and ask them not to include your information in trigger lead lists. They may direct you to OptOutPrescreen.com.
Horror Stories About Credit Trigger Leads
While credit trigger leads can help you get more loan options, there are also some scary stories about them:
- Flood of Offers: People often get swamped with calls and mail after applying for a home loan. This can be annoying and confusing.
- Privacy Invasion: Many people don’t know that their credit information can be sold without their permission, making them feel their privacy is invaded.
- Risk of Scams: Not all companies buying these leads are trustworthy. Some people have been tricked by fake lenders who steal personal information or charge high fees.
- Credit Score Impact: Lots of inquiries from different lenders can slightly lower your credit score, though the impact is usually small.
Conclusion
Credit trigger leads can be helpful because they give you more home loan options, but they also come with risks. Understanding how they work and how to opt-out can help you protect your privacy and avoid scams. Stay informed, be careful, and take control of your credit information. This way, you can manage your home financing safely and confidently.