When you see “pre-qualified” or “pre-approved” on a credit card offer that you receive in the mail, it generally means that your credit score and other financial information match at least some of the initial eligibility criteria required to be on your Cardholder. Understanding the distinction between the two terms can be difficult because companies may use them differently.
What are pre-approved credit card offers?
The pre-approved credit card offers usually come from a credit card company that works with a credit bureau to view your basic credit information. So when you receive one of these offers, it probably means that the information obtained by the credit card company showed that you are a good potential customer.
How to get a pre-approved credit card offer?
Some pre-approved offers may be sent to you by mail, phone, or email. If you are interested in a new card, you can respond to these offers and apply to become a cardholder. Remember: you didn’t actually apply for the credit card when you received one of these offers. But if you’re interested in a new credit card, you can use the pre-qualified or pre-approved offers as an opportunity to shop around before applying.
If you are actively looking for a new credit card, you can search for cards and their terms online. And at Capital One, you can quickly see if you’re pre-approved for a card while using Capital One’s pre-approved tool with no impact on your credit score.
When you request pre-approval for a credit card, the bank performs a “soft” credit inquiry. They get most of the information they need to make an approval decision, but it doesn’t appear on your credit report.
There are several ways to get pre-approved for a credit card.
If you do not opt for preselected credit offers, credit card banks can purchase mailing lists from consumer credit bureaus that meet certain credit criteria. They use this data to send you an email that often says you are pre-approved for a particular card.
Unfortunately, many people respond to these killers and eventually decline because their credit score has changed since the post was published or if the entire credit application reveals additional information to the bank that caused the application to be denied.
The second way to get pre-approved for a credit card is to request pre-approval on the issuer’s website. Many credit card banks offer some type of pre-approval tool, although some are better than others. Some banks don’t really promote these tools because they say, “If you have to ask, you probably can’t approve them.
What if you can’t get pre-approval?
In some cases, it can be difficult for you to get pre-approved for a credit card, even one designed for fair credit. In these cases, a secured credit card is often the best way to start improving your credit score. In many cases, you can switch from a secured credit card account to a regular unsecured account after six months or more of responsible use.
If the reason you are looking for a credit card in the first place is to borrow money at a large or unexpected cost, beware! Generally, if you need to borrow money with a credit card and cannot get permission for a card with a 0% initial APR, you will pay very high-interest rates. In many cases, a personal loan can be a better option than a credit card. You may be able to borrow more money with a personal loan, even with less than perfect credit. However, keep in mind that interest rates, even on the best personal loans, can be quite high.
If your credit score is not excellent, there is a chance that you will experience a decline when you apply for a new credit card. But some issuers offer ways to get pre-approval before applying. If you’ve ever declined your credit card application, you know it’s horrible. You are likely to be disappointed, confused, embarrassed, or angry at that particular bank.
But credit applications are not personal requests. It does not necessarily mean that you are not credible, whether or not you are approved for a particular credit card. Decline simply means that the financial profile of the bank’s target customer does not fit that particular card at that particular time.
While you can spend hours researching the credit score you need to get for a credit card you need, sometimes the best way is to get pre-approved (or pre-qualified) before applying.