Many companies that solicit new credit card accounts and insurance policies use prescreening to identify potential customers for the products they offer. Prescreened offers ? sometimes called ?preapproved? offers ? are based on information in your credit report that indicates you meet criteria set by the offeror. Usually, prescreened solicitations come via mail, but you also may get them in a phone call or in an email.
How does prescreening work?
Prescreening works in one of two ways:
- a creditor or insurer establishes criteria, like a minimum credit score, and asks a consumer reporting company for a list of people in the company's database who meet the criteria; or
- a creditor or insurer provides a list of potential customers to a consumer reporting company and asks the company to identify people on the list who meet certain criteria.
Can prescreening hurt my credit report or credit score?
No. There will be ?inquiries? on your credit report showing which companies obtained your information for prescreening, but those inquiries will not have a negative effect on your credit report or credit score.
Can I reduce the number of unsolicited credit and insurance offers I get?
If you decide that you don't want to receive prescreened offers of credit and insurance, you have two choices: You can opt out of receiving them for five years or opt out of receiving them permanently. Call toll-free 1-888-5-OPTOUT (1-888-567-8688). The telephone number is operated by the major consumer reporting companies. When you call, you'll be asked to provide certain personal information, including your home telephone number, name, Social Security number, and date of birth. The information you provide is confidential and will be used only to process your request to opt out.
Remember that if you have joint credit relationships, like a mortgage or a car loan with a spouse, partner, or other adult, you may continue to receive some prescreened solicitations until both of you exercise your opt-out right.
Why would someone opt out ? or not?
Some people prefer not to receive these kinds of offers in the mail, especially if they are not in the market for a new credit card or insurance policy. They may prefer to opt out to limit access to their credit report information for credit and insurance solicitations, or to reduce some mailbox ?clutter.? However, some companies send offers that are not based on prescreening, and your federal opt-out right will not stop those kinds of solicitations.
As you consider opting out, you should know that prescreened offers can provide many benefits, especially if you are in the market for a credit card or insurance. Prescreened offers can help you learn about what's available, compare costs, and find the best product for your needs. Because you are pre-selected to receive the offer, you can be turned down only under limited circumstances. The terms of prescreened offers also may be more favorable than those that are available to the general public. In fact, some credit card or insurance products may be available only through prescreened offers.
Does opting out hurt my credit score?
Removing your name from prescreened lists has no effect on your ability to apply for or obtain credit or insurance.
If I decide to opt out, how long will it be before I stop getting prescreened offers?
Requests to opt out are processed within five days, but it may take up to 60 days before you stop receiving prescreened offers.
What if I opt out and then change my mind?
You can use the same toll-free telephone number or website to opt back in.
Will calling 1-888-5-OPTOUT stop all unsolicited offers of credit and insurance?
Calling the opt-out line will stop the prescreened solicitations that are based on lists from the major consumer reporting companies. You may continue to get solicitations for credit and insurance based on lists from other sources. For example, opting out won't end solicitations from local merchants, religious and charitable associations, professional and alumni associations, and companies with which you already conduct business. To stop mail from groups like these ? as well as mail addressed to ?occupant? or ?resident? ? you must contact each source directly.
What other opt-out programs should I know about?
The federal government has created the National Do Not Call Registry ? a free, easy way to reduce the telemarketing calls you get at home. To register your phone number or to get information about the registry, call 1-888-382-1222 from the phone number you want to register. You will get fewer telemarketing calls within 31 days of registering your number. Your number will stay on the registry for five years, until it is disconnected, or until you take it off the registry. After five years, you will be able to renew your registration.
The Direct Marketing Association (DMA), a trade association for businesses in direct, database, and interactive global marketing, maintains a Mail Preference Service that lets you opt out of receiving direct mail marketing from many national companies for five years. When you register with this service, your name will be put on a ?delete? file and made available to direct-mail marketers. However, your registration will not stop mailings from any organizations that are not registered with the DMA's Mail Preference Service.
Very few businesses worldwide can claim to be fully secure from credit risks. These are the firms that have the luxury to charge and demand an advance or full payment before they ship out an order. This is not the case for many other companies who face intense competition in the markets that they operate in. These companies have to sell their goods or services on credit, and hence they have to factor their business against credit risks. Credit insurance is one of the main instruments which companies can use to protect themselves from the credit risks and it is becoming increasingly difficult to secure cost-effective credit insurance cover.
Given the nature of such commercial transactions there are some risks that the enterprise supplying the goods or services must deal with. Some of the common risks associated with global commerce are the risk of overdue payments, the risk of repeated delays in realizing the payment from some customers and the risk of the customer going back on the commitments made at the time of the sale, or indeed going out of business. You cannot expect to get credit insurance packages for other sales risk like the customer refusing to accept your goods on the grounds that it is defective or for some other valid reason. Credit insurance also does not extend cover to sales transactions that are disputed by either entity in the transaction.
Credit Insurance is therefore most effective when you negotiate the details of the insurance cover in advance with the insurance broker or underwriter. Some providers of insurance cover try to introduce some restrictive clauses to reduce the effectiveness of export credit insurance policies. This makes it all the more important that you choose an independent insurance broker for your company credit risk insurance requirements. It is also advisable to negotiate a detailed terms of reference as an appendix to every company credit risk insurance cover that you commit to. This will help you to get your claims processed more quickly in case you have to activate the insurance cover.
Most reputable credit insurance brokers will deal with all the major underwriters including Atradius, Euler Hermes, AIG, Coface and Ducroire and have dedicated insurance advisers who are aware of the international laws governing trade and commerce as well as market knowledge of where the most appropriate cover could be obtained. They are also aware of the firms that are less reliable and are likely to be difficult when dealing with claims. Finding a good credit insurance broker is vital if your business is likely to require export credit insurance cover.
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