What is Credit Card Pre-approval?

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If you’re like most adults in the U.S., there’s little doubt your mailbox — the snail-mail version — is regularly inundated with credit card offers. The vast majority of the offers declare your pre-selection, or pre-qualification, for its credit card. Even better, some note you have actually been pre-approved for its best offers and rates.

But what exactly does this mean, to be pre-approved? And what does it mean for you specifically? Are these prefixed words simply a marketing ploy to grab your attention? (It is.) Do you have to act on these blind offers even if you do not need a new credit card? (You don’t.)

Let’s explore what it means to be pre-approved and how to sift through which ones might be right for you.


What is credit card pre-approval?

Pre-approval is not a golden ticket to automatic acquisition of a credit card. It is, however, a good indication there might be very few hurdles on your path to acquiring a card. In most cases (but not all), pre-approval is when a card company has identified you as an ideal candidate for approval after completing some preliminary checking into your creditworthiness. This check could include looking at payment histories, debt amounts and a cursory review of your general credit health. It doesn’t mean a deep credit inquiry, but the card companies will know if you can meet the majority of its credit terms.

Though you stand a better than zero chance of actual approval, a card is not guaranteed. You still have to complete and pass the application and credit approval process.

How to find pre-approved credit cards

You don’t have to wait for an offer to see if a credit card company identified you for potential pre-approval. In fact, you can visit practically any credit card website, and by merely entering your name, date of birth and last four digits of your Social Security number, to know where you stand. Ultimately, this is equivalent to you requesting your own pre-approved offers. If you are in the market for a new credit card, it can help jump-start your search by narrowing down your options to the ones most likely to approve you.

After you enter your basic data, the card company will run a credit check to determine the cards for which you qualify. Along with pre-approval could come various offers from the issuer. In most cases, it will prove to be basic offers afforded to any new applicant. However, some credit card issuers will reward a proactive applicant with special terms and bonuses, such as a reduced introductory APR or enhanced rewards or signup bonuses. Should you carry exceptional creditworthiness, the deals could get even better.

One of the additional benefits to the pre-approved aspect of shopping for credit cards is it will not hurt your credit. Card companies are only taking a soft or cursory look at your ability to meet its terms. The card company is not actually pulling a full credit report. You’ll gain insight into your best card options, and then, once you’re ready to apply, your credit will only be pulled once or twice. While the hit to your credit score for a review is only temporary, you will want to avoid multiple inquiries, which will linger on your credit report.

Pre-qualified vs. pre-approved

Perhaps the simplest way to understand credit card pre-approval is to look at the three most commonly used terms by credit card companies: pre-selected, pre-qualified and pre-approved. While the terms are sometimes used interchangeably, its basic definitions are as follows.

With credit card pre-selection, the credit card company most likely pulled your name from a mailing list and sent you its marketing information, hoping you’ll engage.

If you pre-qualify for credit cards, the card company has taken things a step further. Based on a credit bureau mailing list, you appear to be a good candidate to complete the application process and acquire a card. The marketing materials it sends might be a bit flashier, a bit more convincing.

Pre-approval, as we noted earlier, places in the position closest to approval. You’ve yet to go through a hard credit check, but the card company is confident you’ll meet its approval criteria. It has more data on your creditworthiness than it would in the pre-selection or pre-qualified categories. Your chance for approval is higher than with pre-selection or pre-qualification.

Pre-selected Pre-qualified Pre-approved
How was your information acquired? Mailing List Credit Bureau Credit Bureau
Type of offer? Unsolicited Unsolicited or targeted targeted
Credit check performed? None None Soft Check
Chances of approval? Medium High Very High

The bottom line

While it may seem the endless array of credit cards offers is an exercise in mass marketing, there is a method to the madness. Understanding the difference between pre-qualified and pre-approved — and how a credit card company interprets the meaning — can make finding the right credit card easier. Be sure to read the fine print of each card company so you can understand its terminology.

Don’t always discount the offers you receive. While most are fairly basic, others could net you additional perks. And if you’re actively looking to add a card, taking the initiative can yield even more benefits. In either case, pre-approval helps protect your credit from multiple inquiries and provides you leverage to target those that best fit your needs. Just remember, pre-approval doesn’t necessarily translate to actual approval, but it is a good indicator a new credit card is within your reach.

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