Credit Prescreen Services
Q: I receive offers from financial institutions that seem to know a lot about me and my financial situation. For example, I’ve received offers from auto dealerships the month before my current lease was going to expire. And, my just-graduated daughter has received student loan consolidation offers. Now, how did they know that my current car lease was just about to expire? And how the heck did they know about the student loans?
A: While sometimes it seems like marketers know WAY too much about consumers, your questions are actually pretty easy to address. Financial services marketers have the ability to access consumer credit reports, and present marketing offers to the people they believe will most need them. Just think about the information on your own credit report. It lists the various loans you have along with any associated balances on the accounts. It also contains the types of credit cards you carry. It reports on when you took a car loan, and which company you used for financing. Your mortgage (and monthly payments) are known. Whether you’ve had late payments or even if there’s a bankruptcy on file is included on your credit report. Student loans are also reported to the credit reporting agencies.
That wealth of information is critical to marketers. You can understand if a consumer needs your product/service. Further, you’ll know (based on other commitments and payment history) if they’ll be inclined to pay you. Further, there are literally hundreds of credit attributes available to be mined and maximized in your targeting efforts.
So, what’s the catch? Why aren’t all direct marketers using this valuable source of data?
The answer: Most marketers are regulated against using credit data. There’s an act called the Fair Credit Reporting Act (FCRA) that limits marketers’ access to consumer credit data. While the following provides an overview of legal requirements, for complete information, we urge you to visit the Federal Trade Commission’s website: www.ftc.gov/credit.