Credit Myth – Opting out will improve credit scores
This “credit improvement” technique involves opting out of prescreened or pre-approved credit card offers to minimize the number of inquiries on a credit report.  Consumers can do this for free at www.optoutprescreen.com and prevents credit reporting agencies from selling your information to credit card issuers.  When information is sold to credit card issuers, they pull your credit to “pre-approve” you for a credit card.  A credit inquiry will then post to your credit report.  By opting out, you prevent this from happening.  Again, the idea behind this is less inquiries on your report—fewer inquiries equals higher credit scores, right?
 
While the idea of fewer inquires equaling higher credit scores is true, we have to define the two types of inquiries—hard vs. soft.  A “hard” inquiry takes place when a consumer is applying for a loan or credit.  A “soft” inquiry is when a consumer is checking his or her own credit or when a creditor is checking credit for the purposes of soliciting business.  Opting out DOES prevent the credit reporting agencies from selling your name as part of the pre-approved credit solicitation, but the type of inquiry posted to your credit is a “soft” inquiry and has no impact on your scores.  Therefore, opting out does not increase a consumer’s FICO scores.  Some may question that this technique has worked in the past though.  I have personally seen credit scores increase after opting out, but after careful examination realize the score increase is due to other circumstances.  Examples of other circumstances include lower credit card balances, another month of payment history, or negative information falling off of the credit report just to name a few.
 
As a credit expert, I provide credit education helping people understand how to build and improve their credit scores.  If you, or someone you know, is having issues with credit, contact me to find out how I can help.
 
Kevin D. Weier

Credit Coach, LLC ·  Three Point Place, Madison, WI  53719
Phone: (608) 268-6677 · Cell: (608) 774-2434 · FAX: (866) 311-7478
Web: www.creditcoachwi.com · Email: [email protected]