If you’ve ever responded to a credit card offer, you may already know about so-called pre-approved cards. This does not mean that the issue has been authorized by the bank, but rather that you are in a group of eligible, meeting the minimum requirements. Let’s talk about card pre-approval, how to get a pre-approved card and what to do if you don’t want one.
You received an email or a message on your mobile device that says “Pre-approved card”. Don’t get excited yet! You’re not really approved yet.
- 1 Isn’t approval guaranteed if I received a pre-approved card?
- 2 What it means to receive a credit card offer in the mail
- 3 What does pre-approval of a card mean?
- 4 How to find pre-approved credit cards?
- 5 What is the best way to apply for a credit card?
- 6 What happens after I apply?
- 7 How to stop receiving credit card offers by mail?
Isn’t approval guaranteed if I received a pre-approved card?
That’s right, you’re not guaranteed credit card approval, as we said at the beginning, the issuer included you in a list of possible candidates, and they have sent you a “invitation”.
If you accept it, it will still require a hard review or “hard inquiry” of your credit history, submit the collections and fill out forms. You can be denied even after being “pre-approved” for it.
Receiving credit card offers or invitations in the mail can be exciting, especially if there is a credit card promotion with a low interest rate, what they call 0% APR or an impressive rewards program. But, we repeat, do not get too excited! Being told that the card is pre-approved does not mean that it is approved.
What it means to receive a credit card offer in the mail
when you get one credit card offer by mail, it means that the company has shortlisted you for one of its cards and has determined that you may be a good candidate to apply for it.
In order to better manage these credit terms, the USA.gov official website in Spanish tells us about credit reports and scores.
Banks and issuers use that data to find consumers who fit certain criteria, such as whether or not you have a minimum credit score according to their standards or you have a certain number of accounts.
From there, they can send you marketing and promotional offers, indicating that you have been “preapproved” or that you “prequalify” for one of their cards. But it’s not exactly what it seems, it’s just an invitation.
Think of it like this”an invitation to apply for the credit card”, instead of a call for sign the issue of the card.
After you receive the prescreen offer in the mail, you can submit a formal application for the credit card to determine whether or not you are approved.
Remember, by doing so you are authorizing a “Hard Inquiry” from your credit history and if more than one review coincides in a very short period of time it can end affecting your credit score.
If you wish to delve into this topic, we invite you to consult Chapter V of the Credit card activities manual from the Federal Deposit Insurance Corporation (FDIC).
What does pre-approval of a card mean?
If once you submit your credit card application, the status query indicates “pre-approved card”, means that you still qualify for it but the issuance is not guaranteed.
It is a decision or status that is based on the information you proactively present to the credit card issuing company. You are still subject to a “hard review” process and analysis for the credit card limit to be officially approved.
During the pre-approval process, the information previously required often includes: your name, address and zip code, email, annual gross income, monthly rent; whether or not you pay a mortgage, social security number and location phone numbers.
Does card pre-approval affect my credit score?
Because the credit card issuer has not made a exhaustive investigation (Hard Inquiry) from your credit report, as disclosed by the Federal Trade Commission (Federal Trade Commission) in its Consumer Information section, on “preselected credit and insurance offers”.
However, every time you decide to formalize the credit card application, the issuer will do a credit check that will result in a thorough investigation. The investigation that comes from your application could affect your credit score depending on the specifics of your report.
Being pre-approved does not give you a legal right to use or dispose of the card, you can still be denied the credit card.
It is a possibility because once you officially apply for the credit card, the company will analyze a complete credit report and your submitted collections, to determine if your credit history and your current income continue to meet their criteria for the card.
According to the Consumer Financial Protection Bureau (CFPB o Consumer Financial Protection Bureau) if in the analysis process detect something negative in your report or a deterioration in your financial situation current that was not displayed in the preapproval process, you can be denied the operation.
How to find pre-approved credit cards?
If you haven’t received a credit card offer in the mail, it doesn’t necessarily mean you’re not a good candidate for a card. You can go to the website of a credit card company and fill out a form, shortly you will receive a notification of whether or not you are “preapproved”.
Some credit card issuers make it very easy to find out if you’ve been pre-approved for a credit card on their websites. Typically, you’ll just enter your basic information to learn which credit cards you prequalify for.
Are prequalification checks They usually don’t affect your credit report, unless you impulsively do it to multiple issuers at once. Failure to do so means it won’t affect your credit score.
Checking to see if you prequalify for a credit card is a proactive measure that can save you the hassle of applying for credit cards that are “out of reach,” so to speak. And don’t be foolish in the process.
Forgive us for insisting, but formal credit applications to potential issuers or creditors can affect your credit score and make it difficult to approve future applications.
What is the best way to apply for a credit card?
The fact of get preapproved for a credit card it gives you the opportunity to evaluate what terms you could get if you officially applied for a credit card.
In addition, the pre-approval process (but not approval) triggers a soft investigation (soft inquiry), which does not affect your credit score.
By this we mean, apply for the prequalifications that are available on the portals of the issuers and do not go out of the blue to formalize an application.
With the “prequalification” you will get an instant answer of what could happen if you decide to apply and thus decide if you want to go ahead with that credit card or not.
Always keep in mind that tracking the shortlisted offer that you received in the mail and the credit card application will lead to a hard credit investigation that can potentially affect your credit score.
Although the shortlisted offer alerts you to the fact that the issuer considers that you enjoy a good financial situation, it does not mean that you automatically qualify for the delivery of the card. you shall request the card to find out if it is approved or not.
What happens after I apply?
Regardless of whether you received a credit card offer in the mail or sought pre-approval online on your own, you still need to complete the application by filling out the forms and submitting the documents.
Once you apply, the credit card issuer will take a closer look at your credit history and the information on your application to decide if you really qualify for the preferred credit card.
Ideally, your card will be approved under the same terms that were in the initial offer or during the pre-approval process.
It may also happen that your card is approved, but on much less favorable terms than the pre-selected offer or pre-approval listed.
For example, you are approved for a higher interest rate or a shorter promotional period, a standard card instead of one with VIP status or rewards scheme.
The worst possible scenario? If there’s something even worse: You could be denied the credit card completely once it was pre-approved.
Free credit scores after an unfavorable decision
If you are denied a card, or are approved on less favorable terms than those offered, you can request a free copy of your report. The card issuer will be able to send you a free copy of your credit report and score used in the decision. This is confirmed by the CFPB.
You may also be entitled to a free credit report if your application is denied due to the information for reasons related to your report. You will have 60 days to request this free credit report, one way to do it is to visit the web domain AnnualCreditReport.com.
You can use this opportunity to find out what is hurting your chances of being approved. As a result, you’ll be able to work on improving your credit score, so you can get a card if you decide to apply for one in the future.
Don’t forget to compare costs
Credit card offers you receive in the mail or for which you pre-qualify through the web may not be the best.
Before applying for a card with a pre-approval offer, check online for all the information about that card. In addition, investigate its differences with the main credit cards that compete with it.
You may find something better than the offer you received in the mail. Searching websites can help you make sure you’re getting the best deal.
Compare credit cards that interest you by observing their rewards, loyalty programs, advantages, interest rates, management or maintenance fee and commissions.
Once you find the card you want, see if you can file a preapproval form (and don’t go straight to the final application) to find out if you can qualify for it or not.
How to stop receiving credit card offers by mail?
If you no longer want to receive by mail or email preselected credit card offers, perhaps because you receive too many, or you consider that you are already sufficiently covered with your current cards; you can limit the offers you receive.
Opting out will stop many pre-approved card offers, at least those based on pre-selections through major credit bureaus.
However, you may still receive pre-approved card offers from companies like banks or issuers with whom you already do business. Or from companies that got your information from somewhere other than the credit bureaus.
You can still use the pre-approval tools online major credit card issuers to search for cards when you are in a position to apply for a new credit card.
Remember, look for “pre-qualify”, this way, you will be in control and one step ahead when looking Credit cards on your own.