Credit applications going to the dogs? -- Page 2

But at the same time, the credit card market is nearing complete saturation while banks are still trying to mine new customers.

"For most of the American population, adults who want credit cards already have credit cards," says Lloyd Klein, author of It's in the Cards: Consumer Credit and the American Experience. "At some particular point, there is going to be a problem in expanding the distribution of [the] product."

Klein theorizes that, as a result, credit card companies "are relaxing their screening much more than in the past, and not looking at credit reports to figure out who is a human being and who is a pet."

In a lot of cases, it's almost a shotgun approach, says Manning, also a university professor and special assistant to the provost at the Rochester Institute of Technology. "They're just buying lists of people," he says.

"What you have here is that it's so inexpensive to send things out bulk mail and so inexpensive to purchase mass-mailing lists," Manning says.

Another possible explanation is that "very often credit card companies themselves don't do the screening," Klein says. "They will outsource and hire a firm to do the screening for them. Then the firm will pick out names and throw them in there."

After the offer, then what?
Paula West was shocked a few years back when her then 18-month-old son, Kyler, received several pre-approved offers. "How in the world did they get his name?" asks the high school financial management teacher. "I thought it was insane. It's a joke, but it wasn't really funny."

She believes that the companies got his name from the bank where the family had opened a college fund for the boy. "Just be careful what you put your kids' names on," she advises other parents.

So what should parents or pet owners do if their little ones get a credit offer?

"If they want to have fun, if the kid is old enough to write, have them fill out the application," says Howard. "Tell the entire truth, and see if a card comes. [If it does,] nobody is doing any reviewing at all."

If you decide to fling the offers into the circular file, be sure to destroy them first. "Do not throw them in the garbage," says Klein. The information is too valuable to identity thieves.

And it doesn't hurt to start safeguarding your kids' credit early.

"It wouldn't hurt to pull the credit report on the child to make sure there is nothing on there that is derogatory or fraud," says Howard.

Children are not likely to have a credit report, says McKinley, a father of six. But once your little one gets on one list, your first offer will probably not be the last. So it pays to keep an eye on the mail. "I certainly monitor all the mail that comes in," he says.

Klein even recommends trying to correct erroneous marketing lists.

"Call the credit card company and find out how the name of a child or pet got involved in these databases," he says. "And get that cleared up right away. One company might sell the list to another and the mistake will be perpetuated 100-fold. It's big business out there."