Batch Prescreen Definition

Batch prescreen is a process wherein a credit offer is made by a lender to certain customers who are prequalified. The pre-qualification status is based on the lender’s credit criteria and risk management policies. This process is done in a batch using a customer list acquired from a credit reporting agency or national credit bureau, according to the Securities and Exchange Commission (SEC). The SEC is a U.S federal agency that aims to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

Batch prescreen allows financial institutions to save money on marketing and solicitations costs through the elimination of unqualified prospects. By focusing on the qualified prospects using batch prescreen, marketing efficiency and conversion rates increase. This process helps financial institutions reach prequalified prospects through target marketing campaigns.

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Batch prescreen meaning

How To Perform A Batch Prescreen

To perform a batch prescreen, a company will first need to decide on the pre-qualification criteria for their products. The pre-qualification criteria will be compared to the prospective customer’s credit reports, specifically their borrowing history or credit scores.

Next, the company will request a customer list from a credit reporting agency or national credit bureau, such as Equifax, Experian, or TransUnion. The customer list contains names of consumers in their databases that meet the pre-qualification criteria set by the company conducting the batch prescreen.

Alternatively, the company can give a list of potential customers to the credit reporting agencies or national credit bureaus. Using this list, the credit reporting agency or national credit bureau will then identify which of the customers on the list meet the prequalification requirements set by the company.

Who Can Perform A Batch Prescreen?

There are several institutions that can perform a batch prescreen. Batch prescreens are traditionally done by banks when they prequalify potential customers using pre-set criteria. The pre-qualification of potential customers is made easy by the emergence of credit reporting agencies, national credit bureaus, and automated credit decision software solutions such as iSoftpull.

Various finance-related industries including the automotive and mortgage industry, perform batch prescreens to get lists of eligible consumers whose credit conditions are best suited for specific products or services.

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Batch Prescreening For Lenders

Batch prescreening for lenders is a behind-the-scenes process wherein lenders assess the credit profile of a consumer in order to find out whether an offer of credit is feasible. While batch pre screening is conducted without the consumer’s knowledge or consent, it does not impact their credit report or harm their credit score.

Batch prescreening for lenders is essential in choosing potential consumers to offer credit or loans based on their pre-qualification criteria. Aside from identifying whom to offer credit or loans to, lenders also use batch prescreening to target people for a specific offer that is not available in public. These special offers are in the form of better loan terms, lower interest rates, or added incentives.

Batch prescreening for lenders is done with the help of consumer reporting agencies or national credit bureaus. These agencies compile and provide the list of qualified consumers to lenders or other institutions for the purpose of sending these qualified consumers prequalified offers of credit or loans.

The Federal Trade Commission (FTC) outlines the benefits of batch prescreening for consumers. If consumers are in the market for credit cards or insurance, offers from batch prescreening can help them learn what is available, compare costs, and identify the most suitable products based on their needs and financial capabilities. Another benefit of batch prescreening for consumers is the offer terms are more favorable than those available to the general public. The general public may not have access to credit or insurance offers that are only available through prescreened offers. Lastly, one more benefit of batch prescreening for consumers is the likelihood of being turned down. The likelihood of being turned down in the loan application is lower since consumers were already pre-selected in the first place.

Examples of Batch Prescreen

There are several examples of batch prescreen solutions. The first example is direct mail prescreen. Direct mail prescreening is aimed at expanding financial institutions’ customer base. With the assistance of credit reporting agencies, lenders and creditors are able to better market and sell their products to prequalified customers.

However, there are disadvantages to using direct mail prescreen offers, according to Mortgage Bankers AssociationMortgage Bankers Association. The first disadvantage is the high costs and amount of time it takes to implement. This involves creating, drafting, and printing letters and mailing them to the target consumers. Another disadvantage of direct mail batch prescreening is that it’s not environmentally friendly, with nearly 50% of junk mail being discarded, according to the U.S. Environmental Protection Agency. One more disadvantage of direct mail prescreen offers is the low return on investment. The low return on investment is attributed to the inverse relationship between the volume of direct main prescreen offers and the acceptance rate of consumers.

Another example of batch prescreening is instant prescreen. Instant prescreen is an online and real-time application that allows financial institutions to instantly pre-approve the customer for credit products at the point of sale. This kind of batch prescreening makes the back-end approval process part of every interaction with customers. This allows financial institutions to make a firm offer of credit while the customer is engaged and most likely to agree.

The instant prescreening approach allows financial institutions to capitalize on their existing channels and customer relationships. This process allows financial institutions like banks, mortgage companies, insurance companies, and others to gain new customers at a very low expense. The instant prescreens technology is integrated with the customer channels of financial institutions, which allows them to prescreen any existing customers for added credit products, whether via their website, over the phone, or in their business office.

For more information on batch prescreening for your clients contact iSoftpull the soft pull profesionals.

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