Are you in the market looking for a new credit card? It’s a smart move to shop around, compare the different cards available to choose the best one most suited to fit your spending habits.
Once you zero in on the right card for your needs: a travel card that offers you discounts at major hotel chains, or a cashback card that allows you earn cash for your daily spends, and so on. The next important step is to check if you qualify for it.
As you would know, every time you apply for a new credit card, the card issuer performs a hard inquiry on your credit report. Multiple hard inquiries within a short time frame can cause your credit scores to drop.
This is where pre-approved credit card offers come into the picture. Pre-approved or prequalified means you’ve met the card issuer’s initial eligibility requirements. However, keep in mind that pre-approved offers do not guarantee card approval.
In this guide, the experts at CreditMantri, explain what a pre-approved credit card offer is and why these offers do not impact your credit score.
What is a pre-approved credit card?
A pre-approved or prequalified credit card (both these terms are often used interchangeably) helps prospective applicants evaluate their odds of getting the card before applying for it. Credit card companies pre-screen prospective cardholders based on factors like average income, monthly spending limits, credit score, etc., to create a list of customers who are more likely to be approved for the card.
When you find yourself approved for a prequalified credit card, it means the chances of you clearing the card’s eligibility requirements are higher. However, there is no guarantee that you’ll be sanctioned the card.
You can think of a prequalified offer as a primary selection of suitable candidates for a job. The actual selection happens in the interview. Similarly, a prequalified offer indicates your chances of getting the card. But to get the card, you will have to go through a detailed credit check later, during the time of application.
How pre-approved credit card offers work?
Credit card companies are always looking for ways to increase their customer base. They use different strategies to make their cards appealing to potential customers and get them to apply.
One such strategy to win new customers is sending out pre-approved offers. Credit card lenders pre-screen potential cardholders to decide who is more likely to qualify for the card. Customers who meet this initial check are put into a list. These customers are then sent promotional and marketing emails and postal letters stating that they are pre-approved for the card.
If interested, the customer can then apply for the card. Keep in mind that pre-approved doesn’t mean guaranteed. If you receive a prequalified credit card offer, think of it as an invitation to apply for the card, rather than a firm offer.
Pre-approved Credit Card Offers Don’t Hurt Your Credit Score
Whether you’ve received a prequalified credit card offer from a card issuer or you’ve applied for a prequalification via your bank/credit card company’s website, the good news is that it doesn’t impact your credit score.
This is because pre-approved/prequalified offers involve only a soft inquiry on your credit report. During the pre-approval process, the credit card company only does a soft pull on your credit score. Soft inquiries do not hurt your credit score in any way. The soft pull does not give detailed info regarding your credit profile. It just provides the card issuer with essential information to help them decide whether you make the cut or not.
If you decide to apply for a pre-approved credit card, it’s only then the lender does a hard pull or hard inquiry on your credit report. The lender requests your credit report from the credit bureau(s) to take a detailed look at your credit profile. Depending on the details on your credit report, the lender may or may not offer the card.
A hard inquiry can temporarily bring down your credit score by a few points, regardless of whether you’re granted or denied the card. This is why credit experts recommend that you avoid multiple hard inquiries within a short time frame.
How can I find a prequalified credit card offer?
Finding a prequalified credit card offer is easy. Take a closer look at your inbox for any such offers from credit card issuers or your bank. However, be wary while clicking on these offers. Do not trust offers sent by unknown companies as they can be fraudulent offers or scams.
Alternatively, you can also check for prequalified offers by directly visiting the card issuer’s or your bank’s website. Most banks and credit card companies offer ways for customers to check if they prequalify for a particular credit card. This is a smart move, as it helps you check your chances of card approval without actually applying for the card.
- Pre-approved or prequalified credit card offers do not hurt your credit score.
- Whether you check your eligibility for a pre-approved offer or the bank/credit card agency sends you one, it doesn’t affect your credit score.
- A pre-approved card offer doesn’t guarantee that you will get the card.
- If you decide to apply for a pre-approved credit card, the lender makes a hard inquiry on your credit report, which brings down your score temporarily by a few points.
- If you do not wish to receive any pre-approved offers, you can unsubscribe from the mailing list. Alternatively, you can choose to opt-out by deregistering yourself from promotional and marketing emails from the card issuer/bank.
A pre-approved credit card offer is a great way to check your odds of approval without having to apply directly. Receiving any number of pre-approved offers in the mail does not hurt your credit score. So, you can compare these offers without worrying about the impact on your credit and go ahead and apply if you come across an offer that meets your requirements.