What is prescreening and how does it relate to consumer reports?

• A. Prescreening is marketing to all consumers; it has no relation.
• B. Prescreening is a process of verifying employment history.
• C. Prescreening means marketing to every consumer regardless of credit.
• D. Prescreening uses consumer credit information to identify individuals who meet criteria to receive pre-approved credit offers.

Answer: (D)

Prescreening is a targeted marketing approach that uses consumer credit information to identify people who meet predefined criteria for receiving pre-approved offers of credit or insurance. In practice, a lender requests a list from a consumer reporting agency of individuals who, based on their credit data, appear likely to accept a credit offer. The offers are then sent only to those on that list, not to all consumers.

This is directly tied to consumer reports because the data used to select who qualifies for the pre-approved offers comes from those reports maintained by consumer reporting agencies. The idea is to focus marketing efforts on individuals who, according to the credit information, are more likely to respond favorably.

Because prescreening relies on consumer credit information, there are protections in place, such as rights for consumers to opt out of future prescreened offers. The key point is that prescreening uses consumer reports to identify eligible individuals, rather than marketing to everyone indiscriminately.