Many of us have received pre-approved or pre-qualified credit card offers in the mail at one time or another. But you may be wondering: what exactly does it mean to be pre-approved for a credit card? Does it imply a guaranteed approval?
Before delving into the details, it’s important to realize that not all credit card companies use the same definitions when it comes to pre-approvals vs pre-qualifications.
Some lenders may use the terms interchangeably, while others can use them to mean different things. It depends on the credit card company and type of credit card you’re applying for.
In both cases, however, the “pre” used in pre-qualified or pre-approved means that the lender has reviewed your profile to some extent. In either case, it indicates that your credit history met certain criteria at the time they reviewed it.
What does it mean to be pre-approved for a credit card?
If you’ve received a pre-approved credit card offer, it generally means that the issuer has done a preliminary screening of your credit profile. They might have bought a consumer list or ran a soft credit check to extend you the offer.
Credit card companies can pre-approve potential customers by purchasing consumer lists from the main credit bureaus (that is, Experian, TransUnion and Equifax). Depending on their marketing campaign and the product they offer, they may decide to buy such lists to identify potential customers whose FICO score, for example, falls between a certain range.
In other cases, the lender will run a soft inquiry to check your credit. If you meet certain criteria, they’ll extend you a pre-approved credit card offer.
Just keep in mind that a pre-approval is not a guarantee of credit. You still need to apply and meet the lender’s credit criteria.
What are pre-qualified credit card offers?
If you visit any credit card company’s website, you might find a link to “get pre-qualified” or pre-approved for their credit cards. They’re basically asking you to submit some personal information to check if you’re likely to be approved for one of their credit cards.
In many cases, they’ll also ask you to agree to a soft credit check. They do this to complete a basic review of your credit history and help them determine if you’re likely to meet their credit requirements for the card.
If you pre-qualify, you can move on to the next step in the process and apply for the card.
Is a pre-approval or pre-qualification a guarantee of credit?
By the time you receive a pre-approved credit card offer, the credit card company extending it has already completed a basic review of your credit profile. But they might have done that work a few weeks or months in advance.
When it comes to credit, a lot can happen in a few weeks. Your credit score could have changed: You might have missed a payment, or your level of indebtedness might have changed. So even if you receive a pre-approved credit card offer, you may still be denied.
» See also: Simple ways to improve your credit score.
Will a pre-approval or pre-qualification affect my credit score?
When a credit card company gives you a pre-approved or pre-qualified credit offer, they’ll generally do so by running a soft credit check. A soft credit inquiry isn’t viewed as an “application for credit” an doesn’t affect your credit score.
So even if you don’t pre-qualify for a given credit card, you can move on to the next name on your list and try again. Just make sure you’re filling out a pre-qualification form and not a full application.
When you’re ready to apply, you’ll need to provide additional details such as your gross income, housing situation and other personal information. And as part of the application process, the credit card issuer will run a hard pull credit report.
This hard credit check may have a small impact on your credit score. But once you start using your new credit card responsibly, your score will bounce back in a few months.
» Further reading: Check out our complete guide to understanding credit scores.
How do I pre-qualify or get pre-approved for a credit card offer?
You can pre-qualify or get pre-approved for a credit card offer by visiting the website of the card issuer that interests you. While some credit card companies don’t offer online pre-qualification, plenty of others such as Chase, Citi and Discover do.
You’ll need to provide some basic personal information such as:
- Your name
- The last 4 digits of your social security number
- The card benefit that you most want (cash back, low rate, etc.)
Some credit card companies may require additional information, including: your gross income, your full social security number and your permission to run a soft credit check.
Getting pre-qualified (with a soft inquiry) won’t hurt your credit score. And if you’re denied, you’ll have avoided the hard credit inquiry that comes with a full application. So it’s generally a good idea to get pre-qualified.
How to stop receiving pre-approved credit card offers
When I received my first pre-approved credit card offer, it felt good. It validated my credit-building efforts. But later, I received another one. Then several more. They just kept coming.
After a while, I got tired of all those direct mail offers. If you are too, you can choose to stop receiving them. The Data & Marketing Association—a trade organization for marketers, keeps an online tool called DMAChoice TM to help manage the marketing mail you receive.
They divide direct mail into four categories, including credit card offers. You can request to stop or start receiving mail from individual companies within each category or to stop receiving mail from each category altogether.
Visit DMAchoice to register online to manage your preferences regarding what mail you do and don’t want to receive. Alternatively, the Federal Trade Commission offers information on opting out of unsolicited credit card offers.