Protecting your credit and privacy

I wanted to shed a little insight on what I think are some very disturbing practices that credit providers are engaging in to make additional money at your expense.

Say you are interested in refinancing your home. You go to LendingTree.com or LowerMyBills.com and fill out an online inquiry expecting 4 lenders to compete for your business. You get tons of phone calls. You did want them to compete, right? So after the initial flurry of calls you settle on a lender or two to investigate your options and complete a loan application. The lender needs to look at your credit, and so you provide them the authorization to do so. They give you a quote and you contemplate the offers from the lenders you liked.

Then, mysteriously, your phone rings. It’s another lender. Not one of the original four. Then another lender calls, and another lender and another. None of them from the original 4 you were told would compete for your business. They all tell you that what you are being offered is terrible, that they can beat the rate and the closing costs of what you are being offered. You are frustrated at the new wave of random calls and are now confused about your best options.

What happened? What happened was when you provided the authorization to "pull" your credit from the repositories (Equifax, TransUnion, Experian) the repositories turned around and SOLD your information and the fact that you were in the market for a refinance to a whole additional set of mortgage lenders! These mortgage lenders buy these leads – called "trigger pull" leads and try to steal you away from the banks you’ve started working with.

How do they do this? Each inquiry type is coded with a special designation on your credit report. Auto inquiries are different from mortgage inquiries are different from self inquiries. The credit bureau pulls a report of all people who have inquiries that match the mortgage code designation and then sells your "credit header" information. The header information includes your name, address and telephone number; it may also contain your current mortgage holder and balance information. Mortgage companies looking for cheap leads buy these every day (delivered via spreadsheet over the internet) and then feed them to their loan originators to try to get business (you).

Why I hate this.

You don’t get to decide if your information is sold or not. The credit bureau sells it (for about $1 a record) as soon as you make an inquiry in to refinancing. So if you were only expecting 4 people to call (through an online site like LendingTree) or even if you went to your mortgage broker that you’ve been using for 20 years these companies will still sell your information. You’ll be bombarded by companies all day long once your credit is pulled.
Most of the companies that buy these try to do business on the cheap. They buy these cheap, cold, leads and feed them to their hungry LO’s who will do and say anything to lock you in to a deal with their company.
Most of these leads go to the bottom rung people at the company. Companies save their "expensive" leads for their best people and feed their worst and newest the cheapest leads – trigger pull leads included.
They compete solely by trying to steal your business away from someone else. This means they are prone to bait-and-switch tactics and the heart ache that comes with it.

If you choose to business with someone who got your information from a trigger-pull credit lead, and then piqued your interest by quoting rates and fees lower than what you were previously quoted you are walking in to the lion’s den. You will be eaten alive and will not be happy with your loan when all is said and done.

I recommend not working with anyone who you didn’t solicit directly either via your personal inquiry or through the internet to a company like LowerMyBills. When someone jumps in to the picture at the perfect time recognize that they bought your data, with out your permission, from the credit agencies that sold your data, with out your permission.

What can you do to protect your credit data and not having it fly around the internet to the people that use these trigger leads? You can force the credit agencies not to sell your credit data as a lead. Do this by going to: https://www.optoutprescreen.com/ or by calling 1â??888-567-8688. I highly recommend doing this as soon as possible. If anyone calls you unsolicited while you’re in the process of refinancing tell them thanks but no thanks.

Questions? Let me know.