Do inquiries for preapproved offers damage your credit report? I am trying to make an informed decision on whether to opt out of these solicitations.
Opting out of pre-approved offers does not help your credit score. The inquiries associated with pre-approved offers, also called pre-screened offers, do not damage your credit, because no one but you sees them.
What Are Inquiries?
Inquiries are simply a record that someone has requested your credit report. There are two types of inquiries that appear on your personal copy of the credit report — inquiries viewed by lenders and others and inquiries viewed only by you. They will appear in separate sections in your credit report.
When you apply for credit and other goods and services, the business you are applying with has a permissible purpose under Federal law to check your credit report. These are often called "hard" inquiries, because they can be seen by lenders and can affect credit scores. Because they represent potential risk, hard inquiries may have an effect on your credit scores, although the impact from an inquiry is usually minimal. Inquiries are automatically removed from the credit report after two years.
When a business requests your information for the purpose of sending you a pre-approved offer, the resulting inquiry will be a "soft" inquiry. Soft inquiries do not appear to lenders or anyone else checking your credit report, so they are not factored into credit score calculations. Since you are the only one who sees these inquiries, they do not have any impact on your credit report.
Opting Out Will Not Improve Credit Scores
Opting out of preapproved credit offers will not improve credit scores or hurt them. Your credit report does not indicate whether or not you have opted-out of receiving credit offers, so doing so will have no impact on your credit scores.
Just remember that you can say no to any offer that comes your way. Receiving an offer does not mean that you can or should accept it.
Can Pre-Approved Offers Be Beneficial?
In the past you may have been limited to the credit terms from just a few local lenders. The prescreening process creates a national marketplace for your business, which is an advantage to you.
When a lender sends a prescreened offer, it is to a select group of qualified consumers that already meet specific criteria. Because you have already met certain qualifications, the offers usually have competitive rates and terms.
As a result, prescreened offers create more opportunity for you to select the best credit option for your needs. Therefore, you may find that it is beneficial to continue receiving them, especially if you are shopping for credit. Removing yourself from pre-screened mailing lists will reduce the amount of pre-approved offers you receive in the mail, but it could limit your access to better credit opportunities.
It's also important to understand that opting out only affects offers processed through the three national credit reporting companies. You will likely continue to receive offers from businesses that do not prescreen their offers with Experian.
Thank you for asking,
The "Ask Experian" Team