What Does Credit Card Pre-approval Mean?
Have you ever received a pre-approval letter for a credit card in the mail or through your email? You might have asked yourself, “What does credit card pre-approval mean?” Let’s explore that!
Essentially, pre-approval means that you are likely to get approved for a credit card from a specific credit card issuer. This is based on certain criteria, and it is not the same for every issuer. Credit card companies prescreen customers based on their credit score or payment history. If you are prescreened, that typically involves a soft inquiry to check your credit. But, that will not affect your credit score. Although you can receive pre-approval letters in the mail or apply for pre-approval for a credit card online, it does not mean that you are approved for a credit card. In order to find out if you are approved for a credit card, you will need to continue with your application!
Getting credit card pre-approval may be a thrilling experience. The requirements for pre-approval, however, will vary from issuer to issuer. Keep reading to learn more about credit cards, pre-approval, and more!
What is a Pre-Approved Credit Card?
A credit card company may send you an offer in the mail, by phone, or by email. This offer could indicate that you are “pre-approved” for a card.
That means they have already screened you and performed an informal assessment/verification of your credit report.
However, pre-approved credit card offers are not always guaranteed. After reviewing your application, your request could be rejected for various reasons. Some of these include a comprehensive assessment of your creditworthiness, taking into account all of the information provided in your application, the results of the hard credit inquiry, and/or inadequate income. If approved, you will receive the credit card through the mail, and then you are subject to the specific terms and conditions of the issuer.
How Does It Work?
You don’t always have to initiate an application to receive pre-approval. As mentioned previously, you can simply receive a preapproval letter in the mail or through your email.
Also, credit card pre-approval can happen if you already have a credit card with a company and they introduce a new card. If everything on your credit report appears to meet the credit card company’s initial criteria, you may receive an email approval notification or a phone call from the issuer.
However, pre-approved credit card offers are not always guaranteed.
After reviewing your full application, your request could be rejected for various reasons.
Some of these include a comprehensive assessment of your creditworthiness, taking into account the information provided in your application, the results of the hard credit inquiry, and inadequate income.
For example, you may have reached the minimal credit score criteria but have inadequate income. As a result, the credit card company may still request further information from you before your credit card application is completely approved.
Does Credit Card Pre-Approval Affect My Credit Score?
No, credit card pre-approval does not affect your credit score because the screening process is just a soft inquiry, not a hard inquiry.
When you obtain pre-approval, a soft inquiry is used to check your credit report for things like payment history and credit utilization. When you inquire about the card, however, the issuer will request additional information on your credit report. This means that they need to perform a hard assessment of your credit report, and that may temporarily reduce your score by a few points.
The more cards you try to get, the more credit checks the company must perform. This will potentially hurt your score, so think carefully before applying for many cards.
Are Pre-approved Credit Cards What You Need?
Only accept a pre-approved credit card offer if the card has benefits or will be an asset to your financial portfolio. If you’re unsure whether a pre-approved offer suits you, reach out to your prospective credit card issuer and ask them to explain more about the card and its benefits to you. Many credit cards offer rewards to their users in the form of cashback, points, or airline miles.
Remember that pre-approved offers are often promotional mail for certain credit card companies. So you may not receive the best rewards and interest rates from the issuer. Moreover, a pre-approved offer may or may not meet your specific needs, so weighing your options is crucial. Do thoroughly research, compare, and contrast the offer before deciding.
Where Can I Find Credit Card Pre-approval?
If you did not receive an offer through the mail, you can look for one yourself! Or, you can let Max Cash do the hard work for you.5
Find out if you are eligible for pre-approval today without leaving your home.5 It can be that simple! Don’t wait around for an offer to pop up in the mail!5
