When you’re shopping for a loan—like a mortgage—your credit report is pulled by a lender to see if you’re a good fit for borrowing money. But did you know that when your credit report is pulled, the credit bureaus (Experian, Equifax, and TransUnion) sell your information to other lenders? This process is called “trigger leads.” Let’s dive into what that means for you, and why it can be harmful.

What Are Trigger Leads?

Trigger leads happen when your credit is checked, usually because you’re applying for a loan. The credit bureaus then sell your information (like your name, credit score, and loan amount) to other lenders who are looking to offer loans to people like you. These lenders then flood you with phone calls, emails, and text messages offering their loan services, often within hours of your credit being checked.

Why Is This Bad for Consumers?

1. Unwanted and Overwhelming Contact
   Once trigger leads are activated, you might suddenly get bombarded with calls and messages from loan companies you didn’t reach out to. This can be overwhelming, stressful, and confusing, especially if you’re already working with a lender and don’t need another option.
2. Confusion
   Some of the companies contacting you may present themselves in a way that makes it seem like they are connected to the lender you originally applied with. This can make it hard to know who is really offering you a loan and lead to poor decision-making.
3. Privacy Concerns
   Trigger leads feel like a violation of privacy. You didn’t give permission for your personal information to be shared with other companies, yet your details are being sold without your consent. For many, this feels like an invasion of their personal space.
4. Predatory Practices
   Some of the companies that buy trigger leads may not have your best interests in mind. They might offer loans with higher rates, hidden fees, or terms that aren’t as favorable as they seem. Because these offers can come quickly and seem urgent, some consumers may make rushed decisions that cost them more in the long run.

Current Legislation to Stop Trigger Leads

There is hope that this issue might be addressed soon. The U.S. government is working on legislation that could put an end to the sale of trigger leads. The “trigger lead bill” has been included in the defense spending package. If it passes, this bill would make it illegal for the credit bureaus to sell your information to lenders without your permission.

This bill would protect consumers from being bombarded with unwanted calls and protect their personal information from being sold. It’s a step towards giving consumers more control over their personal data.

What Can You Do in the Meantime?

Until the law is passed, here are a few things you can do to protect yourself from trigger leads:

1. Opt-Out of Credit Offers
   You can opt out of receiving pre-screened credit offers for five years by visiting OptOutPrescreen.com or by calling 1-888-5-OPT-OUT.
2. Work with a Trusted Lender
   Stick with a lender you trust, and if you’re bombarded with offers, stay focused on your original plan. Don’t be swayed by aggressive sales tactics.
3. Register on the National Do Not Call List
   This won’t stop all of the calls, but it can help reduce the amount of spam calls you get. Visit DoNotCall.gov to register.

Conclusion

Trigger leads are a harmful practice that many consumers don’t even know about until they start applying for a loan. The sale of personal information without permission is a major privacy concern, and the resulting flood of loan offers can be overwhelming and confusing. The good news is that the government is working on legislation to protect consumers from this practice. Until then, it’s important to stay informed and take steps to protect your privacy.