Don't fall in Pre-approved
credit line trap

Sales pitches to watch out for:

1. You are Pre-approved for a credit line up to $20,000 just send back the short application or simply call us toll free at 1-800-xxx-xxxx.

2. When banks compete you win.

Thats just two, but the list is long. Remember verbal assurances are meaningless, ask for it in writing, and very important read the small print.

Like in any industry, there are some people who, at best, have unethical business practices, misrepresenting themselves and/or their program.

Most of the offers of " Pre-approved letters and banks compete you win advertisement" are from LEAD GENERATING COMPANY'S

Lead generating companies get your information and sell it multiple times, to anyone who will pay for your information.

Most of the time they are sold to loan officers and/or loan brokers, however frequently even other lead generating companies will buy your information to resell.

Then the calls start coming, from loan offers, loan brokers and credit card offers. This is when People trying to build or repair their credit, fall in the trap.

Trying to get any kind of credit line, they will apply for the credit cards offers, personal loans and/or mortgage loans.


1. Mary Doe has no credit established, She received a Pre-approved credit card offer for a credit line up to $5,000. Mary calls the toll free number and gives her information. The Lead generating company tells her that someone will get back to her within 72 hours.

Within the 72 hours she starts getting calls, answers a few questions, they pull her credit report and then tell her sorry you do not qualify for any of our programs at this time.

Wanting to get a credit card she keeps trying, not knowing multi-creditor inquires have a negative impact to her credit.

2. John Smith worked at his job for 12 years. Over the years John acquired a house, car and some credit card debts. Making his payments on time, he established credit.

One day John decided to paint his house and fell off the ladder, hurting his back, he was not able to work for 6 weeks. Falling behind on his payments, he decided to re-finance his home. With more then $20,000 in equity he didn't think it would be a problem, he had seen Banks (lead generating companies) offering 100% financing all the time.

If he got the $20,000 he could pay off his car and credit card debts, then he would only have one payment to make.

Not knowing what it takes to get 100% finance John fills out an application for one of the " banks compete you win " offers.

Within the 72 hours he start getting calls, answers a few questions, they pull his credit report and then tell him sorry we can't help you.

At first John may have qualified for 90% Loan-To-Value, however since he had his credit report pulled multi-times his credit score went down.

Now John does not qualify for any mortgage loan.

We are not saying all "Pre-approved" and "compete you win" are from Lead generating companies however, You can shop your loan request and/or get a credit card without taking a chance in hurting your credit score.

Need to get Pre-approved check out , What most Mortgage Lenders look for in a loan request