You refinance your mortgage, buy a car, or take out a new credit card and run it up to the maximum.  Suddenly you start getting offers for those high-interest, low-limit credit cards that seem to follow around only people who are in credit trouble.

How the heck do all these companies know something’s changed?  Welcome to the world of “credit triggers.”  Lenders and others - even people to whom you owe no money and have no relationship - can at a pretty minimal cost subscribe to a trigger service with one or more credit bureaus. There are over a dozen parameters that permit subscribers to be instantly notified if there are changes in the credit profile of monitored individuals. These triggers may be employed by creditors as collections assistance, or even by debt buyers as a way to know when to turn the screws on you.

Ever wonder why you pay off one debt and the others start calling?  Or you apply to refinance your house and the old debts you wiped out in bankruptcy magically reappear?  These triggering events may suggest to old creditors that you’re suddenly in a position to pay off that old debt.

According to a post at the AIC Real Estate Blog:

It has gone so far off center that Experian permits a lender to submit a list of names (from its current portfolio? Maybe you?) to be monitored for credit shopping or request that a list of names (not necessarily existing customers) that match a specified profile be generated on a regular basis. In addition, marketing, risk, and retention triggers are now available on a daily, weekly, or quarterly cycle.

So the next time you get a collection letter from an old debt, maybe it’s because the creditor is watching you more closely than you might otherwise think.

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