At a Glance
Getting pre-approved for a credit card before you apply can help prevent dings to your fico credit score. Each application you submit is another hard inquiry into your credit report. Pre-approval can let you know which cards are worth applying to, and which you’ll probably get rejected from.
Before you apply, make sure to understand:
What does getting pre-approved mean?
Pre-approval means that you might qualify for a credit card, but this isn’t guaranteed. Your pre-approval status is based on information that you send to the credit card issuer, or information the issuer has seen from a credit bureau. To officially get approved, you’ll need to send an official credit card application.
The three biggest credit bureaus—Equifax, Experian, and TransUnion—can include your name on lists that creditors purchase from them if you meet certain criteria, such as a minimum credit score. The creditors use these lists to pre-approve you for offers. Even if you get pre-approved, you can still get denied a card if upon closer inspection the issuer finds evidence of issues like late payments or high debt.
Pre-qualified vs. pre-approved
While the terms can be used interchangeably, some credit card issuers may use ‘pre-approved’ to mean they’ve conducted a more comprehensive analysis of your credit than if they just ‘pre-qualified’ you.
Destroy those letters
It may be tempting to toss offer letters in the trash if you don’t want to apply, but make sure you properly destroy them before discarding. This can help you avoid identity theft.
Not all offers are good
While some letters are from reputable companies, others are from predatory lenders looking for individuals with fair to poor credit to sign up for dubious offers. Research all offers carefully before you submit an official application.
How to find pre-approved cards
You can still try and get pre-approved for cards even if you haven’t received a pre-approval letter. If you find an offer you like, you can fill out a pre-approval form on the issuer’s website. You usually just need to enter your name, address, and social security number.
You could also go to your local bank and see if they have any offers. Lastly, you might get pre-approval notices for stores while shopping online. Just make sure your browser’s pop-up blocker isn’t on.
Hard vs. soft credit inquiries
For pre-approval, credit card companies conduct soft inquiries, also known as soft pulls, on your credit report. Soft inquiries don’t affect your credit score. Once you apply, a hard inquiry will be conducted which does affect your score.
Becoming pre-approved can help you decide which cards are worth actually applying for, which will save your score from being unnecessarily lowered.
After you apply
Once you submit an application, the credit card company will closely examine your credit history to see if you actually qualify.
You may get approved with the same terms from your pre-approval process, but you could also get approved with terms that are less desirable than what you originally saw, i.e. a higher credit card interest rate or higher annual fees. The actual terms can change depending on what the issuer finds when they perform their due diligence.
If you’re denied
If you get denied or if you get approved with less favorable terms, the credit card company will send you a copy of your credit score and why you were denied or given higher interest rates. You might also be able to get a full copy of your credit report.