What Is a Trigger Lead? And How Can You Opt Out Of Them?

Have you ever received nuisance phone calls or seen an increase in junk mail from other lenders right after you’ve applied for credit online or spoken with a particular lender or insurance company?

It sure feels like an invasion of privacy when other creditors contact you and seem to know you’ve applied for credit – not to mention that unsolicited phone calls, emails, and junk mail are downright annoying.

Ever wonder why that happens and how other lenders get your personal information? It’s because of a practice known as “trigger leads.”

What is a trigger lead?

Whenever you formally apply for credit or financing, your lender pulls your credit report. This is known as a hard inquiry.

That inquiry automatically “triggers” to lenders that you’re looking for new credit. Those lenders purchase inquiry data from the major credit bureaus: Equifax, Experian, and Transunion.

Many types of companies buy trigger leads, including:

• Mortgage lenders
• Auto lenders and car dealerships
• Credit card providers
• Insurance companies
• Personal loan providers

These companies use the information in trigger leads to market their own credit cards, various types of insurance and loan products to you, with the goal of winning your business for themselves.

Are trigger leads legal?

Trigger leads are legal. Under the Fair Credit Reporting Act, as long as the company that’s buying the trigger leads meets certain legal requirements, they are legal in all 50 states.

If you’re thinking, “How is this legal?,” here’s the logic for it.

The Federal Trade Commission (FTC) and Consumer Finance Protection Bureau (CFPB) actually encourage this type of competition among lenders because they think it gives you a better chance of getting the best possible deal for financing.

So, while trigger leads are frustrating and can feel intrusive, they are legal. And they’re supposed to be for consumers’ benefit, even though it doesn’t usually feel that way.

Related: Why Is My FICO Score Lower Than My Free Credit Score? What Credit Score Apps May Not Be Telling You

Can you opt out of trigger leads?

Yes. You do have options that can help reduce or eliminate the unsolicited contact that results from triggered leads as well as from prescreened offers for credit and insurance.

Register for Do Not Call

The National Do Not Call Registry was created to stop unwanted sales calls. It’s free to register your home or cell phone number.

How to register for Do Not Call:

• Go to donotcall.gov or call 1-888-382-1222 (TTY: 1-866-290-4236) from the phone you want to register. If you register your number at DoNotCall.gov, you’ll get an email with a link you need to click on within 72 hours to complete your registration.
• It can take up to 31 days for sales calls to stop.
• If you continue to receive unwanted calls after your number is on the National Registry for 31 days, you can report it to the FTC.

Not sure if you’re already registered for Do Not Call? You can check whether your number is on the Registry at DoNotCall.gov or by calling 1-888-382-1222 from the number you want to verify.

Opt out of prescreened credit and insurance offers

You can decide that you don't want to get prescreened offers of credit and insurance in the mail.

How to opt out of prescreened mail offers:

• To opt out for five years: Go to optoutprescreen.com or call 1-888-5-OPT-OUT (1-888-567-8688). The major credit bureaus operate the phone number and website

• To opt out permanently: Go to optoutprescreen.com or call 1-888-5-OPT-OUT (1-888-567-8688) to start the process. To complete your request, you’ll need to sign and return the Permanent Opt-Out Election form (which you get online) once you’ve started the process

When you call or visit optoutprescreen.com, you’ll be asked for your personal information, including your name, address, Social Security Number, and date of birth. The information you give is confidential and will be used only to process your request to opt out.

Requests to opt out are processed within five days, but it may take several weeks before you stop getting prescreened offers. This is because some companies may have received your information before your opt out request was processed.

Should you opt out of trigger leads?

We’ve already established that trigger leads can be annoying. But there are good reasons to allow companies to continue to contact you, especially if you’re in the market for a loan, credit card, or insurance.

Reasons to allow entertain credit offers:

• These offers can help you learn about what's available, compare costs, and find the best product for your needs
• Since you were pre-selected to get the offer, you can be turned down only under limited circumstances
• The terms of prescreened offers may be more favorable than those available to the general public. In fact, some credit card or insurance products may be available only through prescreened offers.

If you aren’t in the market for financing or insurance, or you simply don’t want unsolicited offers, you might decide to opt out anyway. But keep in mind that if a company’s offer isn’t based on prescreening, opting out won’t stop their mailings. They can still send you general marketing information, just not based on trigger leads.

Opting out of trigger leads FAQs

What if you opt out and then change your mind? You can use the same website, optoutprescreen.com, or toll-free number to opt back in.

Does opting out of trigger leads impact your credit score? No. Removing your name from prescreened lists has no effect on your credit score or your ability to apply for or get credit or insurance

Will opting out stop all unsolicited offers of credit and insurance? No. Calling the opt-out line or visiting the site will stop only prescreened offers that are based on lists from the major credit bureaus.

You may keep getting offers for credit and insurance based on lists from other sources. For example, opting out won't end requests from local merchants, religious groups, charities, professional and alumni associations, and companies that you already do business with.

To stop mail from groups like these — as well as mail addressed to "occupant" or "resident" — contact each source directly.

The takeaway

Trigger leads enable companies to see when you’re in the market for credit so they can market their own services to you. The upside is that you may find a better deal because of their marketing. But the downside is that receiving unsolicited offers can feel annoying and invasive. You have some say, though. You can opt out of solicitations from credit and insurance companies, as well as sign up for the national Do Not Call registry.