How to Get Pre-Approved for a Credit Card

Introduction

When you first receive a credit card offer telling you that you’ve been pre-approved, you may think that approval is a sure thing.

But in reality, pre-approval isn’t a guarantee of approval. It’s more of an invitation. The issuer has done some research, thinks you’re likely to be approved and is extending an offer.

Let’s explore credit card pre-approvals, how they work and how you can increase the odds of being pre-approved for a credit card.

Understanding Soft and Hard Inquiries

That “research” we mentioned when a credit card issuer sends a pre-approval offer is more accurately a soft inquiry into your credit. Think of it like a job search: Just because a recruiter reached out to you doesn’t mean you have the job yet.

Essentially, the issuer reviews one or more of your credit reports to see if you’re a good candidate for their card. If you are, you may receive a pre-approved credit card offer. Fortunately, soft inquiries don’t affect your credit score.

If you then decide to apply for the card, you’ll also have to authorize the issuer to conduct a hard inquiry into your credit. Hard inquiries may be a more in-depth look than a soft inquiry and what makes the actual determination of your approval.

This hard inquiry will also reflect your current credit situation, which might have changed since the soft inquiry.

A soft inquiry does not affect your credit score, but a hard inquiry could. A single hard inquiry typically lowers a credit score no more than 10 points. But, if you apply for several different credit cards at or near the same time, those point reductions can add up quickly.

Benefits of Pre-Approval

One of the immediate benefits of receiving a pre-approval offer is that it’s a foot in the door. You know you’re more likely to be approved for that card when you apply, because the lender has identified and reached out to you. You don’t necessarily know that about other cards on the market.

Another benefit is convenience: Pre-approval happens without any input on your end. The issuer generally reaches out to you with an offer, which you can accept. And getting this offer doesn’t affect your credit.

Finally, if you’re pre-approved for multiple cards, you can focus on those specific products to compare, research and determine which one best fits your needs. The field has been narrowed to cards that you’re already more likely to be approved for, which can save time on your end.

Tips to Improve Your Chances of Pre-Approval

So, given that being pre-approved for a credit card could improve your chances of actually getting the card, are there things you can do that might entice card issuers to pre-approve you?

Absolutely. And the good news is that most of them come down to things you should probably already be doing to effectively manage your credit. Most of them are also the same behaviors likely to get you actually approved for a credit card, not just pre-approved.

Pay your bills on time, every time

The most influential factor in calculating your credit score is payment history. Consistently making on-time payments of at least the minimum amount due to existing creditors paints a picture of a conscientious, responsible borrower to potential lenders — including credit card companies looking to pre-approve prospective card members.

Maintain a healthy credit utilization ratio

Your credit utilization ratio lets a potential lender know how much of your available credit you’re actually using. If it’s too high — many experts recommend keeping it below 30% — that could scare off credit card companies looking to pre-approve you. That’s because using too much of your available credit could suggest to a credit card issuer that you’re struggling financially or biting off more than you can chew.

Keep hard inquiries to a minimum

A single hard inquiry could lower your credit score several points, and typically stay in your credit reports for two years. Along with lowering your credit score, too many hard inquiries may be seen by lenders as a sign that you’re desperate for credit, or that you’re trying to acquire a lot of credit because you’re strapped for funds.

Don’t open too many new credit accounts too soon

Think it through before you apply for many accounts in short succession. New credit makes up 10% of your credit score, which means that’s how much your credit score can drop by having too many new accounts.

Avoid closing older credit accounts

Even if you’re not using an older account much, keeping it open helps with the length of your credit history (which can account for up to 15% of your credit score) and makes you look more experienced with credit. The credit line of that un- or rarely used account also factors in to calculating your credit utilization ratio, most likely in a positive way if that account has a low or no outstanding balance.

Try to have a diverse mix of credit

Your credit mix only accounts for about 10% of your credit score, but a mixture of revolving and installment credit portrays you as someone who can handle a variety of credit. Not that you should take out an installment loan just to get a better credit mix, but if you have a mortgage, car loan or student loan you’ve been making consistent payments on, it could contribute to being granted pre-approval status by a credit card issuer.

Don’t opt out

The Fair Credit Reporting Act allows consumers to opt out of receiving pre-approved credit card offers.

If you took action to opt out of prescreened lists by calling 888-5-OPTOUT or submitting an online request at OptOutPrescreen.com, then you shouldn’t receive pre-approved credit card offers for five years from the date you submitted your request. And if you mailed in a permanent opt-out form, then you should never receive pre-approved offers.

However, you can receive pre-approved offers again if you call the number above or visit OptOutPrescreen.com to change your preferences.

Steps to Get Pre-Approved for a Credit Card

We’ve gone over some tips to set you up for pre-approval, but you can actively take a few more steps.

Check Your Credit Report and Credit Score

You’ll want to make sure your credit situation looks good. The Fair Credit Reporting Act also entitles you to a free copy of your credit report from each of the three major credit reporting agencies every year. But now you can get free access every week at AnnualCreditReport.com, which is endorsed by the federal government.

If you want to supplement your credit report, some banks also offer access to your credit score on their site or mobile app.

Research Credit Card Issuers

Next, look into the credit card lenders that interest you, or which have cards relevant to your situation. See if they list specific requirements or credit score ranges for approval.

Submit Basic Information

Some lenders may offer a pre-approval tool on their website, which allows you to enter personal details to see if you have any active pre-approved offers from them. Perhaps you missed a mailed offer, or it hasn’t arrived yet but it is in their system.

Now, there is similarly named process called pre-qualification. In this case, you enter information on the bank’s website to learn if you pre-qualify for their cards. This also has a soft pull, but you’re initiating the process rather than the lender reaching out to you.

Review Pre-Approval Offers

Once you’ve received offers, be it in the mail or from checking a few bank sites, you can compare the offers to see which one best fits your needs. If you can’t find any pre-approval offers, you may instead be presented with the option to see if you pre-qualify for a card.

Common Reasons for Denial After Pre-Approval

A few factors could lead to your credit card application being denied, even though you were pre-approved.

The issuer performs a hard inquiry when you apply for the card, which can be some time after the earlier soft inquiry. Your situation may have changed in the interim.

For example, you may be using more of your available credit, which would affect your credit utilization ratio. You might have had some recent negative credit events, such as defaults, bankruptcies, or late payments. Or perhaps your credit score dropped just below the issuer’s threshold.

Bottom Line

Getting pre-approved for a credit card isn’t difficult if you manage your credit responsibly. But it’s not something you, as a consumer, can completely control because the credit card issuer initiates the process.

However, if you follow these tips, you’ll greatly increase your chances of turning that pre-approved offer into an approved credit card application.

Interested in seeing if you pre-qualify for a Credit One Bank credit card? It takes less than a minute and, as mentioned, won’t harm your credit score.