Credit applications going to the dogs?

Who is the ideal candidate for a pre-approved credit card offer? Well, it could be your next-door neighbor with the spotless credit. Then again, it could be your dog -- or maybe your infant.

- advertisement -

Recently, Stephanie Howard got a pre-approved offer for a card with a $100,000 limit. Of the half-dozen offers she's received, this was definitely the largest. Her goal for the money: Buy a few things for her grandparents and her sister -- and a doll for herself. Stephanie is 4 years old.

Her father, consumer advocate Clark Howard, believes the card company got her name from a frequent-flier club membership list.

"If issuing of credit is this sloppy, what's going on with the prospecting of your own name?" says Howard, who hosts a nationally syndicated consumer call-in show. "Knowing the system is this haphazard should be a fair warning to you that you stay up-to-date on your own credit."

Despite this, several credit experts believe the screening process for pre-approved offers is tighter than ever.

"Overall, the screening process is much better," says Robert McKinley, CEO of CardWeb.com, which tracks the card industry. "A decade ago, a credit card company would go to a credit bureau with a handful of priorities. Now it can be much more specific in what it looks for."

Typically, he says, banks cross-reference credit bureau information with other database lists until they come up with a slate of what look like "ideal clients." In addition, "there are some issuers who have taken credit bureau files [from] an affinity group," McKinley says. "If an affinity group has an exclusive contract with members, they may market to all members."

And for the record, pre-approved does not mean what it did years ago. "It's a meaningless term," says Robert D. Manning, author of Credit Card Nation: The Consequences of America's Addiction to Credit. "It's really junk mail."

These days, if you receive a pre-approved offer, it basically means that the bank is inviting you to apply for one of its cards. Based on certain financial criteria or your inclusion in a certain list or club, the bank believes you might be a good prospect. But there is no guarantee that you will qualify.

In fact, in some cases, it's pretty clear that the card company hasn't seen a credit report, since the offers occasionally go out to potential customers who don't have credit reports to see. Steve Borba, of Livermore, Calif., says he recently received one such e-mail offer for his dog, Clifford.

Borba says he filled out the application with answers relevant to his young pug's lifestyle and made it clear in the comments section that this was a joke, and the "applicant" was a canine.

What he received, he says, was a credit card with a $1,500 limit.

And Clifford continues to receive offers by mail and e-mail, Borba says. "We've gotten 10 to 15, easy," he says. The most recent: an offer with a $10,000 limit.

Borba's story is rare, which is what makes it so juicy. About once a year or so, someone pops up with a story of a pet that can now buy his own dog chow on plastic.

"There have always been stories of dogs getting credit cards," says McKinley. "It happens."

Likely the pet owner put the animal's name "on some type of application," says Curtis Arnold, founder and spokesman for CardRatings.com. "And [the credit card company] picked it up. Whoever they are using to get their marketing database, it's on paperwork somewhere."

That explains an offer. But what about an actual card?

"It must have been an automated system," says Manning. But it doesn't happen as often as it used to, partly because embarrassed card companies worldwide are improving computers and filtering systems, he says. "The software is getting better."