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We understand. Here’s what you need to know about these communications and how to prevent them.

Have you ever gotten a call, text, or email from a random business shortly after applying for a loan or credit?

Was the message along the lines of: “Hi (YOUR NAME)!  I wanted to send you a quick update. Right now at Fill-In-The-Blank Financial, our mortgage rates in your area just dropped to a new low. If you’ve been thinking of buying a home, now may be the perfect time! Are you ready to get an unbeatable rate to buy the home of your dreams?”

Regardless of whether it was a call, text, or email, the unsolicited communication may have annoyed you – and creeped you out a little, too.

How did they get your information? How did they know you just applied for a mortgage?

 

Here’s what you need to know.

At Community Bank, we do not sell your information.

What happens is this: When you apply for a loan, we pull a copy of your credit report to verify your creditworthiness. The type of credit you’re applying for – a home loan, vehicle loan, credit card, or something else – will determine the type of report we pull.

This credit inquiry prompts a notification to the national credit bureaus (Equifax^®, Experian^®, TransUnion^®, and Innovis^®) that you are seeking new credit.

The bureaus then sell this information – the credit type and your contact information – to credit companies (e.g., mortgage or credit card companies). This is what’s known as a credit report “trigger lead.”

Companies purchase these leads for a shot at getting your business. After all, the hard work has been done for them – they know your information and the type of credit you’re after.

What makes this practice even trickier is the wording these companies use in their communication can be misleading. It may confuse borrowers as to who exactly they are corresponding with.

You might believe you’re talking to us, when in reality you’re communicating with a stranger.

Kind of shady, huh? How is this practice even legal?

It’s a topic that’s been up for debate. Some proponents of trigger leads, particularly in the mortgage industry, believe they help keep the home loan market competitive, helping prospective homebuyers find the best rate.

The downside, of course, is the abundance of solicitations consumers receive shortly after completing an application. Some applicants have reported receiving solicitations in as little as 20 minutes after their credit has been pulled.

As things stand, trigger leads are not off-limits under the Fair Credit Report Act. However, there is reason for optimism in progress being made to protect consumers’ information.

 

The encouraging news.

Legislation has been created that, if passed, would thwart this practice in regard to mortgage lending. The bill is called the “Trigger Leads Abatement Act of 2023.”

It was introduced to the House of Representatives in April of 2023 and states:

“This bill prohibits credit reporting agencies from providing a credit report not initiated by a consumer if the report is being provided on the basis that the consumer has had a credit inquiry regarding a home mortgage loan. This practice, known as producing a trigger lead, provides notice to other mortgage lenders that the consumer is seeking a mortgage loan.”

 

You can “opt out.”

You have the right to “opt out” of credit or insurance offers that originated from trigger leads. OptOutPrescreen.com is the office Consumer Credit Reporting Industry website to accept and process requests to opt in or opt out of these offers. You can also call the toll-free number, 1-888-5-OPTOUT.

NOTE: It can take up to five days to process an online request. If you apply for credit before or during the opt-out process, you may still receive calls and messages.

 

Questions or concerns?

If you have further inquiries or would like more information, our team is happy to speak with you.

Contact Us

 

Know that at Community Bank, we always have your best interests at heart and will do everything in our power to protect you and keep your finances safe!