The media, newspapers, internet are full of information, but sadly, much of the information concerning credit is inaccurate. Let’s check out some common credit myths:
Credit Myth: “Opting out will increase your credit score.” This is something that goes back a long time, and let’s discuss what opting out is. “Opting out” refers to a method where a consumer chooses to not have their information sold for prescreened offers. You’re familiar, of course, with pre-screened offers – that’s when you get something in the mail that says, “You’re approved for this credit card!” We all get them every week, I would imagine you generally respond by rolling your eyes and throwing
them away, like most people do.
The credit bureaus resell information in bulk to credit card providers. This system allows credit card providers to make offers in the mail to multiple people. Bear in mind, these credit card providers don’t get to actually see your individual files. The credit card companies will give a generic example of what they want. They want people with an average FCRA score of “X” and have a set amount of credit cards existing. Then the credit bureaus will actually send the data to a third party on behalf of the credit card company for mail distribution, so the credit card company never actually sees your data. They only know that you fit a certain demographic profile they’re targeting with that particular offer.
If you opt out of prescreened offers,that has wide-reaching effects. It ultimately means that the credit bureaus cannot sell your data. If they can’t sell your data, well, your data is really not worth anything to them. So many people in the past thought they saw an increase in their credit score after an opt-out, but as someone who’s been in the middle of this industry for many years, there’s been nothing to prove that that’s ever actually taken place. There was, however, at least a reasonable-sounding premise behind this myth. It goes like this: if you’re opting out, saying that you don’t want credit, that you have enough credit, and you’re responsible for credit, therefore they’ll give you more on your credit score. But it was never calculated in your credit score that way, and it was never proven to be a fact that way. We’ve never seen any relation to that, and believe me, we watch everything VERY closely in this industry.
We do, however, feel that opting out can help you when disputing, because we feel that there’s a potential for credit bureaus to segregate data that’s not worth anything to them…a “scrap pile,” if you will. We have seen an increase in the deletion rate, for dispute rates for opting out. So opting out is something that we definitely encourage.
P.S. DisputeSuite provides a variety of solutions for your credit repair business. From engaging custom websites, to dispute processing services, to a robust CRM with automations and portals, DisputeSuite is a One-Stop Shop to making your Credit Repair Business A Success!
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