Inquiries for pre-approved offers do not affect your credit score unless you follow through and apply for the credit. Show
If you read the fine print on the offer, you'll find it's not really "pre-approved." Anyone who receives an offer still must fill out an application before being granted credit. The pre-approval means that the lender has identified you as a good prospect based on information in your credit report, but it is not a guarantee that you'll get the credit. The lender wants more information, like your annual income. Pre-approved offers are sometimes referred to more accurately as "prescreened." Key Takeaways
The Two Types of Credit InquiriesThere are two types of credit inquiries into your credit score. They're known in the business as soft inquiries and hard inquiries. Only a hard inquiry is an indication that a lender is actively considering extending credit to you or has just done so. Credit Scores: Hard Vs Soft InquiriesWhen a consumer fills out an application that accompanies a pre-approved offer, the lender will sometimes use the soft inquiry that has already been pulled to make its decision, or it may pull a new report using a hard inquiry. A soft inquiry is seen only by the consumer. It has no effect on a credit score, and other lenders cannot see them. Hard InquiriesA hard inquiry is the kind that's used when someone applies for a credit card or loan, such as a mortgage or a car loan. It is an indication that the person is considering taking on additional debt and has taken positive steps toward doing so. Potential lenders can see hard inquiries. Hard inquiries can affect a consumer's credit score, but usually will only if there are a number of them. In any case, the impact of a hard inquiry on a credit score is very low compared with other factors such as a person's bill payment history and credit utilization ratio. Hard inquiries on your credit report might be a concern if, say, you're about to submit a mortgage application. The lender might question whether you are about to take on substantial additional debts that are not reflected in your credit history. Lenders will sometimes deny a credit application because an applicant has too many other recent inquiries. This might indicate that they are going through financial difficulties or anticipating big expenditures in the near future. These hard inquiries fall off a credit report after two years. If you can't wait two years, one of the credit repair companies might be able to get the hard inquiries removed sooner. Soft InquiriesA soft inquiry is used by a lender while deciding whether to pre-approve a consumer for a credit card. Other soft inquiries occur when a consumer's current lender pulls a credit report for an account review, or when a debt collector checks a credit report for recent activity. When you check your own credit rating, it gets logged as a soft inquiry. Even hard inquiries, which are initiated when you apply for credit, don't have much effect on your creditworthiness—unless you have a lot of them in a short period of time. How to Opt out of Pre-Approved OffersIf you prefer not to receive pre-approved credit card offers, federal law allows you to opt out for five years at a time. To do that, you can either call 888-5-OPT-OUT (888-567-8688) or visit www.optoutprescreen.com. You can also opt out of pre-approved insurance offers. It's also possible to opt out permanently, starting at the website above. After you make your request online, you need to fill out, sign, and return a permanent opt-out election form. This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page. Have you ever opened your mailbox to find an advertisement from a credit card company? If so, you may
have received a pre-approved offer of credit. Getting a credit card pre-approval can be nice if you’re in the market for a new credit card, especially if the card comes with a special welcome offer. But you shouldn’t think that a pre-approval guarantees that a card issuer will give you a credit card in your name. Here's what
it really means when you receive a pre-approved credit card offer.
Sign up for our daily newsletter For more TPG news delivered each morning to your inbox, sign up for our daily newsletter. In the United States, there are three major
credit bureaus (Equifax, TransUnion and Experian) that collect and maintain financial data about millions of consumers. The primary way the credit bureaus make money is by selling that data to other businesses like credit card companies, lenders and insurance providers. Credit card companies often purchase consumer data from a credit bureau for marketing purposes. A card issuer can give a credit bureau a set of search criteria (i.e., location, minimum credit score, no bankruptcies, etc.) and then receives a list of consumers that match those requirements. Per the Fair Credit Reporting Act (FCRA), the credit bureaus may share (aka sell) consumer credit information to companies that wish to make an offer of credit or insurance. For example, a card issuer could buy a list of 2 million consumers (names and addresses) in the Chicago metro area with the following criteria:
If your name appears on the list, a soft credit inquiry would appear on your credit report to let you know that the card issuer had accessed some of your credit information. The credit card company might then mail out a “firm offer of credit” to everyone included on the prescreened list. Tip: If you don’t want the credit bureaus to share your information with other companies for marketing purposes, you can visit OutOutPrescreen.com or call 888-5-OPTOUT. What happens when you want to accept a pre-approved offer?Getting a pre-approved offer can be a good sign when it comes to your odds of qualifying for a new credit card account. However, it’s not a guarantee of approval. Some card issuers may use the term “pre-approved” without a soft credit inquiry. Even with a firm offer of credit that includes a preliminary credit check, you still have to apply to open a new account. Be sure to note on any documentation you receive from the issuer whether you have to apply through a dedicated link or include a specific application code. An official application can help the card issuer make sure you meet its full criteria to qualify — including income, employment status and other factors. The card issuer will also perform a hard inquiry on your credit report to see if anything in your credit history has changed between the time it sent you a pre-approved offer and the application. According to FICO, a new hard inquiry may temporarily lower your credit score, though usually by fewer than five points. Related: 4 incorrect assumptions about your credit score Why you might be denied for a pre-approved offer of creditIt isn’t common, but a credit card issuer could deny your application even after sending you a pre-approved offer of credit. The exact reason for such a denial can vary from one applicant to the next. Below are a few reasons why a card issuer might turn down your application after sending you a pre-approved offer.
Related: The ultimate guide to credit card application restrictions How to get pre-qualified for a credit cardIt’s easy to shop around for the best credit card offers available. Yet figuring out which credit card offers you’re most likely to qualify for can be more of a challenge — especially if you’re struggling with less-than-perfect credit or you have little to no established credit history. The good news is that there are several online tools you can use to figure out if you’re a good candidate for certain types of cards. You can use CardMatch to discover whether you pre-qualify for certain card offers from American Express like The Platinum Card® from American Express and the American Express® Gold Card. Capital One, and Discover offer pre-qualification tools as well. As with preapproved offers that card issuers send out on their own, a pre-qualification doesn’t guarantee that you’ll be eligible for a particular credit card product. But going through the pre-qualification process can help you to make a more informed decision before you fill out an official credit card application. Related: How to find the best pre-qualified credit card offers Featured image by Getty Images Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities. TPG featured card
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Can I be denied credit card after pre approval?It isn't common, but a credit card issuer could deny your application even after sending you a pre-approved offer of credit. The exact reason for such a denial can vary from one applicant to the next.
How long does it take to get a credit card if you're preHow long will it take to receive the new card? Although you may get approved for a credit card almost instantly if you apply online, it can take up to 14 days for the card to arrive in the mail. If you applied for the card by mail or over the phone, approval may take longer.
Is it good to accept a preIt feels pretty flattering when your bank notifies you and lets you know that you've been pre-approved for some form of credit. It's a sign that lenders are viewing you as a low-risk client. Stay on the path you're on, and you'll continue to unlock better interest rates and more borrowing opportunities.
Why was I preYou may be rejected for a variety of factors, such as having a low income, a short credit history or too much credit card debt.
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If you are pre approved for a credit card will you get it
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