If you’re in the market for a new credit card, a pre-approved offer can be a tempting way to accelerate the process. But with all of the different options, it can be hard to determine if you’re truly pre-approved.
Pre-approved offers, also known as pre-screened offers, are issued based on information in your credit report indicating that you meet basic credit criteria.
Before you apply for a pre-approved credit card, there are a few things you should understand about a pre-approved credit card offer:
1. A pre-approval is an offer.
While an initial screening process does occur for pre-approved offers, this does not mean that the credit card issuer must provide you with a credit card. You will still need to apply in order to get final approval. In this way, a pre-approved credit card offer is more of an invitation than an acceptance letter. It means that the lender has identified you as a potential candidate, is aware of your general credit standing, and wants to make you aware of the credit products offered for people in your credit range.
Offers may also be based on membership in certain groups or relationships with certain companies. For example, frequent travelers may receive solicitations for pre-approved airline credit cards.
After you apply, the lender will determine whether your credit history meets the lending criteria. There’s no guarantee you’ll receive the terms of the original offer, and you could be rejected entirely.
2. A pre-approved credit card offer will not impact your credit score.
The initial screening that lenders use to select pre-approved individuals does not impact your credit score. In fact, your credit score will not be impacted until you decide to apply for the card.
After you submit your application to the lender, the lender will request your credit score. The credit score request is called a “hard inquiry,” and it will remain on your credit report for 24 months. Even if your credit request is denied, the inquiry will still impact your credit score.
While being sent a pre-approved credit offer doesn’t hurt your credit score, every time you apply for a credit card a lender will pull your credit report, which will result in a hard inquiry that will impact your credit score. For that reason, you may want to avoid applying for several credit cards at the same time.
You may want to pull your free credit report through AnnualCreditReport.com or purchase your credit score from one of the three credit reporting agencies (CRAs) beforehand so that you know your general standing and can apply for the type of credit card that fits your credit range. You should be aware that the credit score you purchase may be an educational credit score and may not be the credit score used by your potential lender. That said, the credit score you purchase may help you figure out what type of interest rate you can reasonably expect the lender to offer you.
3. After you apply, you may be approved for terms that are different from the offer.
If you are approved after you apply for the credit card, you may end up with different terms and conditions than what was included in the original offer.
Your credit card APR dictates the interest rate you will pay if you carry a balance from month to month. The higher the APR, the more the credit card will cost you if you carry a balance. Many credit card offers advertise an attractive APR, but the rate you get will depend on your credit history and credit score.
Read over the terms and conditions and, if you are approved, be sure you understand your APR and other financial obligations related to the account. If you do not carry a balance from month to month, then you will not have to pay interest on the credit card, but you may still be obligated to pay other costs, such as an annual fee.
4. You can opt out of pre-approved credit card offers.
If you already have several credit cards or aren’t interested in borrowing, you can opt out of pre-approved credit card offers by calling 1-888-5-OPTOUT (1-888-567-8688) or by visiting OptOutPrescreen.com.
You may also contact the Direct Marketing Association (DMA), which manages an opt-out list for consumers who generally prefer not to receive mail or phone offers. You can sign up for this service on the DMA’s website or download a form to submit by mail. You can also call the DMA at to have the form mailed to you.
According to the Federal Trade Commission (FTC), has no effect on your ability to apply for or obtain credit, but you may not receive the terms from pre-approved offers that may be more favorable than those offered to the general public.
5. Shred any unused credit card offers.
Credit card offers may contain sensitive personal information, such as your full name and address. You should shred these documents to protect yourself from identity thieves and scammers, who are known to scavenge dumpsters in order to find documents with personal information. Be sure to lock your financial documents and records in a safe place and destroy them when they are no longer needed.
6. If you are sent a physical card with a pre-approved offer, don’t try to use it.
A bank or lender cannot legally send you an actual credit card in the mail, so if there is a card in the offer envelope, don’t try to use it. This precaution, which was instituted by the Unsolicited Credit Card Act of 1970, is for your protection—to guard you against fraud, payment liability, or credit damage.
Before you respond and apply to a pre-approved credit card offer, be sure you read all the terms and conditions. Also be wary of incurring hard inquiries that could impact your credit score.
Please let me know if you have any questions.
President and Certified Credit Expert