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Vault’s Viewpoint on Credit Card Preapprovals

• Card issuers generally send preapproved or prescreened offers by mail or email.
• Many, but not all, credit card issuers offer ways to check prequalification online.
• Preapproval and prequalification involve a soft credit inquiry, which doesn’t negatively impact your credit score.

What Does Preapproval Mean?

When you’ve been preapproved for a credit card, a credit card issuer has targeted you and is likely to approve you. The process involves a soft credit inquiry. Consider preapproval the first step in a screening process initiated by the card issuer, not individuals, because you meet basic criteria—like a minimum credit score, low credit utilization ratio or positive payment history.

You may receive preapproved or prescreened offers by mail, email or phone. Preapproved offers can come from credit card companies with which you already have an established relationship or from other issuers.

Preapproval is often considered a stronger indicator of approval than prequalification but it’s not a guarantee that you’ll be approved. You must still apply for the card. The card issuer will perform a hard credit inquiry during the application process, which dives deeper into your credit history. A hard credit inquiry can cause your credit score to drop temporarily.

What Does Prequalification Mean?

Prequalification refers to tools credit card issuers offer that allow individuals to check whether they are prequalified for a credit card. The process is usually initiated online on the card issuer’s website using a form similar to a credit card application. After supplying some basic personal and financial information, the issuer will show you any card offers you’re likely to be approved for based on your situation. Like preapproval, the process relies on a soft credit inquiry.

Some card issuers share prequalified offers with existing card customers through their online accounts. You can log in to your account to view potential offers. As with preapproved offers, you must apply for the card and meet the issuer’s credit and other requirements to qualify for approval.

Do Preapproval and Prequalification Offers Impact Credit Score?

Credit card issuers and lenders perform two types of credit inquiries. Soft credit inquiries, like those used for preapproval and prequalification, give credit card companies a basic overview of your credit profile, like existing credit accounts or the number of credit report requests received. Soft credit inquiries, also called soft credit pulls or soft credit checks, have no impact on your credit score.

When you apply for a credit card, you are subject to a hard credit inquiry. This process examines your credit history in greater detail. Issuers may see details such as credit limits, account balances, recent inquiries and previous credit inquiries. Hard credit inquiries can cause your credit score to drop temporarily. The exact amount your score will drop can vary depending on your credit history and other factors.

Both types of credit inquiries remain on your credit report for two years, but card issuers and lenders can see only hard credit pulls.

Pros and Cons of Preapproved and Prequalified Offers

Pros

• They do not impact your credit score
• They can help you compare credit card offers before applying
• The offers you receive may be better than the ones publicly advertised
• Preapproval and prequalification are good indicators that you will be approved for a card if you apply
• You’re not required to apply for a card offer even if you’re preapproved or prequalify

Cons

• Preapproved and prequalified offers do not guarantee card approval
• You may receive unsolicited offers through the mail you don’t want
• You may not qualify for the exact terms or offer if approved for a card
• The soft credit inquiries used with prequalification and preapproval provide a limited view of your credit profile and could yield much different results than the hard inquiry used when applying for a card
• Consumers may be inclined to open a credit card they don’t necessarily need because they received an offer

See Also

Wells Fargo Reflect® Card Review 2024Best No-Annual-Fee Cards For Travel Of April 2024How to Check for Business Credit Card Preapproval in 2024Avoid a hard pull on your credit with preapproved card offers

How To Check if You Prequalify for a Credit Card

Many credit card issuers offer ways to check for prequalifying offers online. To check for offers, navigate to the prequalification tool on the issuer’s website. You’ll fill out a form with personal and financial information, which may include your:

• Full name
• Physical address
• Date of birth
• The last four digits of your Social Security number
• Income
• Housing status

Fill out the form completely and submit it. Once submitted, you should quickly see any available prequalifying offers. The offers you receive may not include your desired card. Even if you don’t qualify for a particular card, the issuer may share other offers to entice you to consider other options based on your credit.

If you receive a prequalifying offer, you can choose to apply for the card or do nothing. There is no negative consequence if you decide not to apply. If you wish to apply, click the offer link and submit your application. The card issuer will consider your application, your credit score and history and other information to determine your eligibility for card approval.

Credit Card Issuers That Offer Prequalification or Preapproval

Many, but not all, credit card companies offer prequalification tools to check for offers. Here’s a look at major credit card issuers that currently offer prequalification online:

• American Express
• Bank of America
• Capital One
• Citibank
• Credit One
• Deserve
• Discover
• Navy Federal (Requires membership)
• Synchrony
• Wells Fargo

Some card issuers, like Chase, may offer prequalifying offers to existing card customers. If eligible, you can view any offers by logging in to your Chase online account. Most major credit card issuers send prescreened or preapproved offers by mail. These offers will direct you to a specific website where you can enter your offer information and officially apply for the card.

What If I Don’t Want To Receive Prescreened Offers?

Depending on your credit, credit card issuers and partner companies may target you with preapproved or prescreened offers through the mailbox. The Fair Credit Report Act permits consumer credit reporting bureaus to include your name on lists used by card issuers and lenders to make prescreened offers.

What’s meant as a marketing tool for eligible consumers can also be a nuisance, especially if your mailbox is littered with offers each week or month. Preapproved offers have no negative impact on your credit but can be annoying if they occur frequently. Luckily, the Fair Credit Reporting Act also allows consumers the right to opt out of receiving prescreened credit card offers.

To opt out of, visit optoutprescreen.com or call 1-888-567-8688. You can choose to file an electronic request through the website to opt out from receiving prescreened offers for five years. To opt out permanently, you must submit an opt-out form by mail to:

Opt-Out Department
P.O.Box 530200
Atlanta, GA 30353
RE: Permanent Opt-Out Election Form

Alternatively, if you’ve opted out of preapproved credit card offers in the past and would like to receive them again, you can submit an opt-in request through the same website.

Using this opt-out service will remove your name from offer lists provided by the following credit reporting bureaus:

• Equifax
• Experian
• Innovis
• TransUnion

Unfortunately, opting out will not remove your name from offer lists that rely on other information sources.