After qualifying or pre-qualifying for a loan, you might notice that your mailbox is a bit fuller than usual or field an influx of spam calls. No, it's not your imagination — applying for a mortgage or other types of loans can cause your junk mail and spam phone calls to multiply.
Whether they're offers to apply for lines of credit and personal loans — or advertisements from local companies vying for your business — junk mail and spam calls can be a nuisance. One Synovus customer received 136 calls from lenders after getting pre-approved for a loan — 50 of those between 8 p.m. and 10 p.m. on a single night!
Don't worry. All that junk mail doesn't mean someone hacked your data — or that your bank is sharing your personal info. So where is all of this unsolicited mail coming from? And more important, how can you stop it?
Why You Get Junk Mail After Pre-Qualifying for a Loan?
There are two reasons you might be inundated with offers after applying for a loan. One is because credit bureaus sell your information. The other is because your mortgage record is public. You'll find more info about each reason below.
Credit bureaus sell your information
If you think the data collected by Experian, Equifax and TransUnion is entirely private, think again. The three major credit bureaus can sell your information to certain companies offering "pre-approved" credit. In fact, the credit bureaus make money selling lists to banks and credit card companies.1
For example, when you apply for a mortgage, the lender runs your credit, creating an "inquiry" that appears on your credit report. An inquiry indicates you may be shopping for credit. Another company can then buy a list of consumers who have had a recent inquiry on their credit report from the credit bureau and market their services to you.
Your mortgage is public record
If you recently bought a home or refinanced your mortgage, the transaction is a matter of public record. Anyone can access your name, address, and loan amount.2
Many companies compile this information and sell it to other businesses, such as lawn care businesses and remodeling contractors. In turn, these local businesses send you junk mail in hopes of getting you as a customer.
How to Stop Unwanted Solicitations
Don't worry. There are some simple steps you can take to reduce the number of mortgage-related solicitations you get — and to limit junk mail more generally.
Opt out of pre-approved credit and insurance offers
To stop receiving pre-approved credit and insurance offers in the mail, visit optoutprescreen.com,3 a website operated by the three major credit bureaus.
You can opt-out for five years or permanently. If you want to opt-out permanently, you'll need to print a form, sign it and mail it to the address provided on the document.
This method prevents pre-screened offers from credit card companies, lenders and insurance companies but doesn't eliminate mail from local businesses, religious or charitable associations, or political groups.4
If you plan to get pre-qualified for a loan — or plan to apply for a loan — the best time to do this opt out is before the bank pulls your credit report. This is the most effective way to prevent offers based on your bank making a credit inquiry. But it's still worth doing even if the bank has already pulled your credit report, because that will help tame the problem going forward.
Register with the Direct Marketing Association
Another way to reduce the influx of unwanted mail is by registering with DMAchoice.org,5 a service developed by the Direct Marketing Association (DMA). This tool allows you to choose what catalogs, magazine offers and other mail you want to receive.
The DMA charges a $4 fee that covers a 10-year registration period.
Registering with the DMA won't eliminate all junk mail. You may still receive promotions from companies you've done business with in the past two years, as well as local retailers, restaurants and political organizations.
Register for the National Do Not Mail List
The National Do Not Mail List is a free service provided by DirectMail.com.6 The company compiles a list of consumers who do not want to receive junk mail and supplies that list to mass marketers so they can remove people from their mailing lists.
It's entirely optional for companies to remove your name from their list when you register for the National Do Not Mail List, so this isn't as effective as opting out of pre-screened offers.
Sign Up for the National Do Not Call Registry
The National Do Not Call Registry is a free Federal Trade Commission (FTC) service designed to reduce unwanted sales calls.
To sign up, visit the National Do Not Call Registry at donotcall.gov7 and register up to three phone numbers.
Once you register your phone number, it takes about 31 days to stop receiving calls from legal telemarketers. However, its reach is limited. You may still receive calls from telemarketers outside the U.S. and those within the U.S. who ignore the law.
Additionally, you can call 1-888-5-OPTOUT (1-888-567-8688) or visit OptOutPreScreen.com. The phone number and website are operated by the major credit bureaus. When you call this toll-free number or visit the website, you will be asked to provide certain personal information, including your home telephone number, name, Social Security number and date of birth.
The opt-out process generally takes five (5) days to complete but may take up to 60 days before the solicitations cease.
Freeze Your Credit Report to Prevent Identity Theft
If identity theft is a concern, a credit freeze restricts access to your credit report, making it difficult for fraudsters to open new accounts in your name.
To freeze your credit, you must contact the three major credit bureaus online, over the phone, or by mail.
Here are the instructions from each of the credit bureaus:
Once you've placed the freeze, the credit bureau will not release your credit report or score without your permission.
While freezing your credit can help prevent new accounts from being opened in your name, it does not prevent fraudulent activity on existing accounts. You should continue monitoring all bank and credit card statements and regularly check your credit report for evidence of fraud.
Important disclosure information
This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information. Diversification does not ensure against loss.
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