What Are Credit Triggers?

June 28, 2012 by  Filed under: Credit 

Credit Triggers are notifications provided to creditors about the transactions of their subscribers. This is a fast increasing development in the financial world that is already recognized by the three primary credit report firms. The chance for creditors to be notified with these triggers has been considered in the past. However, this is not always considered by the financial world. Today, creditors could sign up for alert services from credit reporting agencies. Creditors are alerted immediately when there’s a movement on the account of a certain client in whom they are concerned.

The factors affecting the triggers could depend on the options. Each creditor selects the conditions, and then will be notified of triggers that are on the same line of the particular option. Generally, there are three primary kinds of triggers – collection alerts, risk notices and now a hot topic – prospects for marketing.

In credit triggers in form of risk alerts, creditors could be alerted of a trigger once their subscribers make some changes that could signify more risks such as new loans, or failed payments. These changes could be viewed as an increased risk on the part of the creditor. Once you stumble upon that your updated credit has some random changes, your creditor could be notified with triggers from a credit firm and thus changing your account in response. For instance, your credit limit might be lowered without any notice.

Collection alerts are services that are subscribed by creditors or collection firms based on actions pertinent to other debts. Once you start to settle your debts, then the collection agency or the creditor will be alerted that you have initiated new payments. Your creditor will view this in a way that if you can pay your other debts, then it could be high time to demand you for payments.

Credit triggers used as marketing opportunities is a hot topic in the financial world that has continually debated by many experts. Now encouraged by reporting firms, marketing triggers provide creditors with alerts for their borrowers who could be interested in their products and services. On the other hand, they could also notify creditors when their borrowers are searching for other financial options.

With the development of credit triggers used for marketing campaigns, borrowers and financial gurus are not actually united in deciding of triggers on these form could actually do good. Some claim that monitoring the credit report for movements could be regarded as an offense to a person’s privacy. They argue that once a client provides authorization for a certain creditor to review credit report, this is limited to be used on any other purposes.

On the other hand, proponents of credit triggers as a marketing tool say that this could be beneficial for both creditors and borrowers. One seen advantage is that financial firms could be more competitive for their rates and terms resulting to better deals for both sides. You could have your personal opinion about credit triggers, particularly for marketing campaigns. However, nothing can replace the benefits of tracking movements of your credit report.

The author gives advice on finding credit reports in South Africa. To read more visit creditreportsa.co.za

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