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I'm a 24 year old PhD student with a good credit history. I got a report done about a year ago and verified that there are no black marks on it; I've had a credit card since I was 18 that I've always paid off every month and never gone over 20% credit utilisation, and I have a charge card that I use more regularly that again I have consistently paid off on time.

Additionally, I have multiple direct debits for bill payment, none of which have ever failed or been unsuccessful.

So I'm at a little bit of a loss, then, as to why I constantly get advertisements in the post for high-interest credit cards and loans aimed at people with very low credit ratings. I got one in the post today with nearly 400% APR. I have no interest in taking out these credit cards but I am very curious as to why I am receiving them. My girlfriend who lives with me does not get any and so I doubt it's in any sense based on our postcode.

Can anyone shed any light on this?

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    Holy cow. Can you post a pic of the offer? Please scrub any of your personal information, but it would be interesting to see. The bottom line is you are targeted as a sub-par borrower. You are on some mailing list. – Pete B. Sep 7 '16 at 20:27
  • @PeteB. This one actually a loan- usually cards. Added in the body of the question. – A Simmons Sep 7 '16 at 20:32
  • Does your girlfriend go to the same school? Perhaps your school/program involvement leaked through some type of registration you did, and students / your program in particular are considered high risk? – Grade 'Eh' Bacon Sep 7 '16 at 20:39
  • @Grade'Eh'Bacon I doubt it... We both did maths at Cambridge. – A Simmons Sep 7 '16 at 20:46
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    @dg99 In the UK there is the "Caller Preference List" and "Mailing Preference List" to opt out of unsolicited calls and mail shots. Also, even though I'm sure you are joking, I feel obliged to point out that "Mathematics" is a plural. – Nick R Sep 8 '16 at 0:10
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The most important operative word in your post was "student". As a college student, you end up on the lists of all the card issuers, because students are a huge source of new accounts for the card companies. The issuers buy the lists of students from schools (or other sources), and in a nutshell, that's how you began (and continue) to receive offers.

Students also tend to have poor or nonexistent credit scores, so they attract the card issuers who deal in that segment of the credit markets, which automatically entails high fees and interest rates. Very little effort is made to cull out people on the list who may have better credit than the average of the pool being marketed to -- the issuers use a "shotgun" approach to marketing by sending offers to everyone on the list. Asking for the list providers to refine the search parameters costs more money, so it is more cost-effective to send offers to everyone as a whole.

I used to work for MBNA bank, which specialized in credit cards to students, so I'm familiar with "how the sausage is made" when it comes to this market.

I hope this helps.

Good luck!

  • I suppose this has a good chance of being it, although I am always surprised that companies seem to lump PhD students in with undergraduates. I'm effectively salaried and not taking on any further student debt... – A Simmons Sep 8 '16 at 0:00
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    The lists they buy very likely don't make that distinction, because every option to refine the marketing lists costs money. – Daniel Anderson Sep 8 '16 at 1:10
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Something that is worth mentioning here is that, in general, creditors do not have access to your credit files and therefore do not know your scores when they send out those offers. In short, they don't really know if you are a good or bad credit risk when they send you "pre-screened" offers. They merely obtained your name and address from some bulk mailing list somewhere. Only when you choose to apply do they do a hard inquiry on your credit file(s), and really find out what kind of credit risk you are.

Unless you opt out, some (all?) reporting agencies may classify you into a broad group and "share" (read: sell) your contact info to various creditors they think will be a good fit. But we can't know for certain if that has happened, and it's just as plausible that your name was put on some mailing list by some other entity--a school, another lender, who knows.

I used to get these pre-screened offers for various (and nutty) credit cards in the mail that were advertised as "exclusive" (to entice the recipient), where the annual fee was hundreds of dollars and the interest rates--although nowhere near 400% APR--were definitely on the higher end of what's commonly available, around 18-35%. And I put a stop to that, not only because I wasn't interested in such offers, but also because I didn't want to open myself up to mail fraud and identity theft. There's supposed to be some number you can call to automatically remove yourself from all pre-screened offers of credit for a certain period of time, at least in the US. If you don't want the credit reporting agencies to share any information about you to creditors for marketing purposes, you need to opt out with each one.

But, as I mentioned, the nature of these offers do not necessarily have any relation to your actual creditworthiness, because these creditors don't actually know what's in your credit files, and at best, only have some vague idea of your score range based on demographics and/or your broad financial associations (e.g., some other creditor sold your info).

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    You are right to a degree, but also off the mark a little. You're correct that the companies sending the offers don't know your score exactly, but when they buy the lists they can request to buy only names which fall within a particular credit score range. However, narrowing down the lists by selection criteria adds to the cost, so they may not do this. The point is, they do have the option to define any number of criteria for the lists they buy, including (potentially) the credit score range the people on the list must fall into. – Daniel Anderson Sep 8 '16 at 3:28

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