Credit pre-screening is when a lender obtains credit information to see whether or not a potential customer meets their credit criteria.
If you've ever gotten a credit card offer in the mail claiming you are pre-approved for that credit card, you have been credit pre-screened.
The Fair Credit Reporting Act gives lenders the opportunity to to prescreen consumers before sending out firm offers of credit. This does not give them access to full credit reports, and credit pre-screening a potential borrower does not impact their credit.
In order to pre-screen someone, a lender needs to have permissible purpose to do so; they have to have the ability to lend to the consumer. Before the Fair Credit Reporting Act was enacted, lenders could send marketing to anyone offering credit. Those who received these offers would call the lender, the lender would do a full credit pull, and that consumer could then be denied. This would hurt that person's credit, and leave them worse off than they were before they received that marketing. Credit Pre-screening is in place to protect consumers from this scenario playing out.
Through pre-screening, lenders are able to obtain some limited credit information enabling them to send marketing out to only those who qualify to borrow. Lenders can tailor their credit criteria based on their lending standards to identify potential borrowers.
MonitorBase works similarly, screening credit data of those in your database to see who meets your criteria. Once a potential borrower is identified, MonitorBase automatically sends out a firm offer of credit via email and direct mail on your behalf. This is all ultimately for the good of the consumer and to give them protection from unnecessary credit pulls.