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Preapproved credit card offers are essentially invitations to apply for credit cards you'll likely be approved for. You can get these offers after applying online, or as part of a prescreened list of consumers who meet a credit card issuer's criteria.
Getting preapproved for a credit card doesn't guarantee you'll be approved. The offer is contingent on another credit check and additional financial information, such as your income, which isn't on your credit report. However, getting preapproved can be a helpful first step in determining whether you'll likely get approved for an offer.
The Difference Between Prequalified and Preapproved Credit Card Offers
Prequalified and preapproved can mean the same thing, particularly when you're looking at credit card offers.
Credit card issuers may use the terms interchangeably to describe a scenario in which you submit a preliminary application to see which cards and offers you may qualify for. Card issuers may also preapprove you for a card or offer and extend a firm offer of credit if they've prescreened you and determined you've passed their basic criteria.
However, prequalified and preapproved can have significantly different meanings in other lending situations. With a mortgage, for example, a prequalification may mean the lender has given you a general idea of how much you can borrow based on your estimated income, debt and credit.
A mortgage preapproval is often a more complex process—similar to that of actually applying for a mortgage—that can require submitting documents and the lender verifying your information. As a result, a mortgage preapproval can give you a better sense of what you'll likely be approved for and your interest rates, and can reassure sellers your offer is legitimate.
Do Preapproved Offers Affect Your Credit Score?
Getting preapproved for a credit card generally won't impact your credit scores.
When a credit card company prescreens you for an offer, it will result in a soft inquiry on your credit report. Soft inquiries, also called soft pulls, never impact credit scores. In this case, the card issuer is reviewing your credit report to see which cards or offers you could be eligible for, not checking your credit report to make an approval decision. That's an important distinction because a credit check that leads to an approval or denial is often a hard inquiry, which may lower your credit scores a little.
If you see that you're preapproved or prequalified for a credit card and then apply, the card issuer may check your credit before making a decision, which can lead to a hard inquiry.
Getting preapproved for a credit card can be beneficial because it lets you know you've passed the initial step toward getting a card. While being preapproved doesn't guarantee you can get the card, being turned down for preapproval may prompt you to work on improving your credit and trying again later rather than submitting an application.
Types of Preapproved Credit Card Offers
You can sign up and see your matches now when you use Experian's credit card comparison tool to compare cards and offers and see if you're preapproved based on your credit profile. Depending on your circumstances, you may be interested in using this tool> to find one of the following:
- Rewards cards: Many credit cards offer some type of rewards when you use the card for eligible purchases. Different types of rewards, such as general travel rewards, airline miles or cash back appeal to different cardholders.
- Cash back cards: Cash back rewards cards are a popular type of rewards credit card. It's simple to understand the value of the rewards you earn, and you can benefit from the rewards even if you rarely travel.
- Cards for bad credit: Credit card companies offer certain cards to people who have no credit or bad credit and are trying to build good credit. These are sometimes secured credit cards, which require a refundable security deposit.
- Cards for fair credit: As your credit improves, you may become eligible for credit cards that offer more rewards, lower fees and don't require a security deposit.
- Balance transfer cards: A balance transfer card could be a money-saver for those who carry credit card balances. You can transfer existing credit card balances to a new card that offers a promotional interest rate—often 0%—during an introductory period.
- Low interest credit cards: Cardholders who regularly find themselves carrying a balance may want to look for a low interest card rather than a rewards card.
You can also use Experian's comparison tool to find debt consolidation, personal and student loans.
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How to Opt Out of Preapproved Credit Card Offers
Many consumers want to receive preapproved credit card offers because it allows them to easily compare the cards they'll likely be able to get to the cards they're currently using. You may also get preapproved for a sign-up bonus or promotional interest rate that's not available to the general public.
If you want to opt out of prescreened credit card offers, however, you can call 888-5-OPTOUT (888-567-8688) or submit your request online at OptOutPrescreen.com to opt out of offers for five years. To request a permanent opt-out, fill out the necessary form and mail it to the address provided by OptOutPrescreen.com.
If you've previously opted out, you can always opt back in to receiving preapproved credit card offers by calling the same number or visiting the website and choosing the opt-in option.
Make the Most of Preapproved Credit Card Offers
Regardless of how you apply for a credit card, once you receive the card, it may offer the same benefits, fees and terms. However, credit card companies offer promotional rewards and rates to attract new cardholders.
Prescreened credit card offers can give you access to some of these promotions. You can also use Experian's card comparison tool to compare offers from multiple creditors without hurting your credit scores. Plus, getting preapproved for a credit card can help you avoid submitting applications that could be denied and still lead to hard inquiries on your credit report.