Does anyone know if opting out improves your credit score quickly? I was told by my mortgage broker that by opting out our scores would go up several points within a week or so? Do you think that this could be true?
Ask him what he bases this claim on. If true, he should be able to point you to a reputable source of information that offers an explanation of the claim. If he used the words "several points", I'd ask him to clarify what he meant. Did he mean 5? 10? 40? While "opting-out" *is* a good thing when you're in the market for a mortgage, it would be wise to ask for clarification from him on exactly what he meant or precisely how he defined "several points".
Sounds like an old wive's tale, if the FICO score increase is directly caused by opting out, and not by refraining from making any further applications for credit. It would make a great congressional investigation if it came out that the FICO scores that affect so many credit granting decisions, and even insurance decisions, were actually affected by such a trivial choice. I don't believe that Fair-Isaac mentioned anything about it in their FTC presentation: http://www.ftc.gov/bcp/creditscoring/present/sld001.htm Nor is it clear that report users who pull reports that are flagged "opt-out" see that it is so labeled. There appears to be a range of "meta-data" that is not visible in credit reports, that would need to be maintained by the CRAs. In fact, it could be considered an anti-competetive disclosure of private information, since it could allow your existing lenders to jack your rates knowing you were not receiving competitive offers. There have been some implications, however, that promotional inquiries may have been used by the CRAs as the legal cover for notifications to CAs wanting to collect from debtors that those debtors may be more collectable due changing financial circumstances indicated by inquiries from mortgage lenders. The promotional inquiry information itself provided to a CRA customer does not include full credit information, but it is not clear how specific the search criteria can be that is used by the CRA to produce the promotional list.
Well from my experiences with doing loans, Opting out really has nothing to do with your credit scores. Opting out is to stop getting all the solicitations that clutter your mailbox everyday. Its just like spam mail. The only way that this will affect your score is when you reply to the solicitor and they actually pull your credit report causing a hard inquiry which you authorized by responding to the "pre approved" or what not.
