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What is credit card pre-approval?

Credit card pre-approval deals can be very appealing to prospective credit card customers.
Find out what a credit card pre-approval is and why the issuer can still deny your application.

Many credit card issuers contact prospective customers with credit card pre-approvals. They send these offers by email or direct mail, inviting you to apply for deals. The details of these offers can include low-interest rates and generous sign-up bonuses.

Issuers will use a screening process to ensure they are contacting customers who best fit the criteria for their credit cards. They will gather information from the credit bureaus like your existing accounts and credit score. It will not affect your rating because it doesn’t involve performing a hard check on your credit report.

There’s no guarantee of approval

A credit card pre-approval may not be everything it seems. The issuer isn’t giving you automatic entitlement to a credit card— they’re just inviting you to apply.

As an issuer only has access to limited information, and they can’t guarantee approval. You will need to formally apply, which allows the issuer to perform a hard credit check and examine your credit history. This type of inquiry appears on your credit report. Too many of these searches can harm your score.

The lender will go ahead and refuse your application if they decide you don’t meet their eligibility requirements following the check. You also might not receive the same rates and terms that were advertised in your pre-approval letter, even if you are approved.

Finding pre-approval credit cards online

You don’t have to wait for a lender to reach out to you. Online approval tools let you check if you are likely to qualify for credit cards before you apply. You can see what offers you’re eligible for by filling out a short form online with your personal details and basic financial information.

These online tools operate in the same way a pre-approvals. They perform a soft check on your credit report to give you an indication of which credit cards will suit you. This won’t affect your credit score unless you decide to complete the application.

It’s still a good idea to shop around for the best deals, even if the issuer has sent you a pre-approval. Be proactive by doing some research into their recent offers and those available from similar lenders. Make sure you take various factors into account before making a decision, including interest rates, credit limits, rewards, and annual fees.

What to do if a lender denies your application

A lender may offer you less favorable borrowing terms, or outright reject your application, based on your credit score. If this is the case, they will send you a free copy of the credit score they reviewed during their decision-making process.

If you make a request within 60 days, you may also be able to receive your credit report for free. Review this in detail to identify areas where you can make improvements to your credit score. A higher credit score means lenders are more likely to accept you for credit in the future.

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