COLUMBUS – In recognition of National Homeownership Month, the Ohio Department of Commerce Division of Financial Institutions (DFI) is highlighting trigger leads, an aspect of the home-buying process consumers may find intrusive.
Trigger leads are a type of marketing list offered by all three credit reporting agencies, Equifax, TransUnion and Experion, said a press release from Ohio Department of Commerce. These lists are generated automatically based on specific actions or events that indicate a consumer may be in the market for a particular product or service. Trigger leads are very prevalent in the mortgage loan market.
If you have ever applied for a mortgage loan and then received a flood of calls from other lenders offering their services as well, that was likely the result of a trigger lead. When a consumer applies for a mortgage or other type of loan and the lender pulls your credit report, this activity triggers, or alerts, other lenders and insurance companies that you’re looking for credit or financing for that type of loan. These lenders are then able to purchase your inquiry data and solicit their services to you.
“A lot of the credit lenders use trigger leads in the course of their business, but the mortgage industry especially uses them as a way of targeting their marketing,” said Pamela Prude-Smithers, deputy superintendent for the Division of Financial Institutions, in the release.
Bills have been introduced in the U.S. House of Representatives and the U.S. Senate to amend the Fair Credit Reporting Act (FCRA) to curtail the practice of trigger leads with mortgage loans; however, trigger leads remain legal under the FCRA.
There are important things to consider as well as steps you can take to reduce or alleviate trigger leads:
Trigger Leads and Credit Scores
Trigger leads themselves do not negatively impact an individual’s credit score; however, the initial action that triggers the leads may have an impact on credit score since applying for a mortgage loan is considered a hard inquiry and multiple credit inquiries can lower a person’s score. Applying for a loan will be the action that triggers other mortgage lenders to contact you, but again, this only happens if an individual applies for a mortgage loan.
Potential Drawbacks to Trigger Leads
Trigger leads can sometimes result in individuals receiving a number of calls from multiple lenders who want to offer their mortgage lending services. To some individuals, this may be bothersome and seem to be an invasion of privacy that could lead to concerns about harassment and unwanted solicitations.
Potential Benefits of Trigger Leads
Trigger leads can be helpful to those industries utilizing them. For example, it allows mortgage lenders to streamline their marketing efforts and focus on leads that are more likely to be interested in their services. As a result, the consumer may end up finding a lender that better suits their needs.
Opting Out
You can opt out of pre-screened offers by going to www.optoutprescreen.com. This opt out will be sent to the three national credit bureaus. In addition, you can put yourself on the National Do Not Call Registry at 1-888-567-8888, or add your name to the list by visiting www.donotcall.gov.
