How Preapproval Can Help When You’re Credit Card Shopping

When you shop for a credit card, every hard inquiry can affect your credit score, albeit temporarily. That’s why you should only apply for a credit card if you’re fairly certain your application will be approved. Credit card preapproval allows you to find out whether you are likely to qualify for a card before you apply.

Preapproval involves sharing basic financial information with the issuer, which it uses to determine whether you’re a good match for a card.

A credit card preapproval is an educated guess, and card approval isn’t guaranteed but likely. Here’s what you need to know about credit card preapproval and how to get one.

A credit card preapproval uses a soft credit inquiry that won’t hurt your credit score. However, if you decide to turn a preapproval into an application, this can affect your credit in the short term.

Make sure you’re submitting a preapproval request and not a full application, says Jeff Richardson, VantageScore’s senior vice president of marketing and communications.

“Always read the fine print because you might actually be applying for credit and not know it,” Richardson says. “But, in most cases, a preapproval is a soft pull.”

The terms preapproved and prequalified are often used interchangeably when it comes to credit cards, but they are not exactly the same. Preapproval and prequalification both aim to match you to a credit card offer, but they differ in who does the matching.

Generally, issuers send preapproved offers to prescreened consumers by mail or email to see if they meet credit requirements. Consumers will initiate prequalified offers, however, to check whether they qualify for particular credit cards.

Although prequalification can be useful for consumers, keep in mind that it’s not an application for credit. “It’s essentially a way for card sites to get a bit of your personal information for marketing purposes, and it’s not a reliable measure of your creditworthiness,” says Barry Paperno, former FICO consumer affairs manager.

If you want credit card companies to send you preapproved credit card offers, you can opt in at OptOutPrescreen.com. This will allow you to receive prescreened credit offers with good approval odds and in some cases to access products exclusively available as prescreened offers.

If you prefer to seek preapproved credit card offers individually, follow these steps:

Preapproval does not guarantee approval for a credit card, though it’s a pretty sure bet. Approval requires a hard credit check and additional information, including your income, which may be verified.

If you receive a prescreened offer, however, it is a firm offer of credit based on information from credit reporting companies, according to the Consumer Financial Protection Bureau. But you still need to apply and be approved for the card.

Most major issuers offer preapproval as a way to shop for cards without the risk of hurting your credit score from hard inquiries. Some of these card issuers include:

Being a creditworthy consumer can increase your chances of getting the best preapproved credit card offers. In general, credit card issuers prefer customers with good to excellent credit. A credit score above 740 means you’re likely to be approved for most cards, Richardson says.

Although the importance of creditworthiness can’t be understated when it comes to credit card offers, Richardson says you might not have to look far for credit card preapprovals. The most accessible credit card offers may come from an issuer you have a relationship with because the company already has a lot of information about you.
“A lending institution you’ve worked with in the past helps your chances,” Richardson says.