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Don’t Be Tempted By “Pre-Approved” Offers

By Nicole Carey

Services for Real Estate Pros with Beyond Financial Services

January 18, 2007 04:44 AM

Many companies buy your information from credit bureaus and then swamp your mailbox with "pre-approved" offers. These "Too Good to Be True" offers are often very tempting. More often than not, they are not true. Continually applying for these so called "pre-approved" offers can really affect your FICO score.

You have the right to stop these solicitations. Call 1-888-5-OPTOUT to prohibit credit bureaus from sharing your information without your consent. You will see a gradual decrease in unsolicited mail over time. Yes!

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I am a certified credit consultant, licensed mortgage broker, and foreclosure prevention expert. Please contact me if you have any questions on this blog our Beyond Financial's services.

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LLoyd Nichols

Premier Florida Realty of SWFL - Fort Myers, FL

Southwest Florida Homes By The Sea

Hi Nicole.very important blog. I thinkk that if you have your credit checked more then 4 times ( tell me if I am not correct ) in the last 30 days, your credit may drop.Anyway pre-approved does not do much these days.Loan commitment is the thing as you know.Some lender told me that they can pull one's credit score and still not having it "count" or "show" as a pulled credit, or influence your score..even if its the 4 th one? what is your opinion? I think many tell stories.

Jan 18, 2007 05:09 AM

Nicole Carey

Beyond Financial Services - Pembroke Pines, FL

Lloyd,

Pre-approved offers have consumers believe they are pre-approved for a credit card, loan, etc. Once, they call in to accept the offer, the company then runs their credit report, and let's them know whether or not they are "actually" approved. These are "fishing" strategies. A consumer who falls for this constantly can lower their FICO score 5 - 35 points each time they have their credit "pulled."

You credit inquiries or "pulls" are weighted based on how frequent they occur. For example, credit bureaus weigh credit inquiries in a 3-mo and 6-mo period heavier than those occuring 1 year ago. Each credit pull affects your credit score for 1 YEAR! Each time your credit is pulled your score is affectd - Period! How many points are deducted depends on the consumers credit profile amongst other factors. But as mentioned before, it can range from 5 - 35 points.

THE EXCEPTION. The only exception to this rule is Mortgage and Auto Loan Applications. A consumer can have their credit pull multiple times while shopping for a home loan. The credit bureaus gives them 30 DAYS to shop around and receive just ONE HIT against their credit score.

The similar applies for auto loans. Consumers can have their credit pull multiple times while shopping for an auto loan. The credit bureaus gives them 14 DAYS to shop around and receive just ONE HIT against their credit score. There were talks to have this threshold increased to 30 days as well. Not sure if has taken affect.

So the short answer to your question is yes and no. The lender is correct if he/she is pulling your clients credit within 30 days of the 1st credit pull to obtain a home loan. However, many lenders don't pay attention to this. You would need to study your clients inquiries to see when was the first time they began loan shopping.

Jan 18, 2007 07:31 AM

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Nicole Carey

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