Pre-Approved Credit Card: What is it and how does it help?

Are you planning to apply for credit card and have no idea how to do it. Before you get your bank’s approval for a credit card, remember that you may already be pre-approved for it. This is very convenient because you will know your chances of getting a credit card before you even apply for it.

It is worth noting that pre-approval does not require a thorough investigation and hence your credit score will not suffer in the process.

What is a pre-approved credit card?

A pre-approved credit card is an invitation from a bank to apply for a card online. Essentially, it is a process in which a bank evaluates the creditworthiness of an applicant who is likely to qualify for one of its credit cards before they formally apply. Pre-approval is usually based on a soft credit check.

This means it will not affect your credit ratingand can give you an idea of ​​your chances of approval without looking closely at your credit report.

How does this work?

Initial inspection: Credit card issuers or banks typically use your basic financial information (such as income level and credit score range) obtained from credit bureaus to pre-screen applicants who meet certain criteria.

Offer: If you meet these criteria, you may receive an introductory offer. Additionally, some credit card companies allow you to check if you are approved for certain cards on their websites.

Soft credit check: During pre-approval, card issuers conduct a soft inquiry that allows them to review parts of your credit history without hurting your credit score. Based on this soft check, they decide whether you meet the initial criteria for receiving the card.

Accepting an offer: If you receive a pre-approval offer, you can decide and apply for the card. Once you formally submit your application, the bank will conduct a hard credit check, which may affect your credit score, albeit temporarily. The card issuer or bank will then check your full credit history to make a final decision.

Final approval: Although pre-approval increases the likelihood of approval, it is not a guarantee. The issuer will review your complete credit profile before making a final decision.

What are the benefits of pre-approval?

No impact on your credit score: Getting pre-approved for a credit card doesn’t affect your score until you apply, making it a low-risk way to explore options.

Save time: If you get pre-approved, you’ll have a better idea of ​​what credit cards you might qualify for, saving you time from applying for cards which can turn you away.

Better chances of approval: Pre-approval usually means you meet the card’s basic criteria, which increases your chances of a successful application.

Pre-approval offers often come directly from credit card issuers, but you can also find pre-approval tools on comparison sites or online portals of major banks. You may also receive pre-approval offers by mail or email based on your credit profile if you have opted in to receive promotional offers.

To sum it up, getting pre-approved for a credit card can be a helpful step when applying for a credit card without affecting your credit score.