Preapproved vs. pre-qualified for a credit card: What’s the difference?
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Published 6:49 a.m. UTC Feb. 21, 2024
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It’s natural to be confused about preapproval and pre-qualification, since lenders and credit card issuers often use the two terms interchangeably.
When it comes to credit cards, the difference is that preapproval is usually a more thorough screening process than pre-qualification. While neither one is a guarantee you qualify for a card, preapproval is often a stronger indication that you meet the requirements.
One way to keep them straight is to think of it like you would when applying for a job. While it’s nice to hear an employer say you’re qualified for the role, it’s more meaningful to find out you’re one of the finalists.
What does pre-qualified mean?
Pre-qualification is a simple process you can initiate online, over the phone or in person, depending on the credit card company. Getting pre-qualified for a credit card may involve a soft credit inquiry (which doesn’t hurt your scores) from the creditor, and you’ll likely be asked to self-report some or all of the following information:
- Annual income.
- Rent or mortgage payments.
- Total amount in savings.
- Details of any existing debts.
Some creditors offer instant or nearly instant pre-qualification, but even if you get pre-qualified right away, you’ll need to follow up with a full application to find out if you’re actually approved or denied for the card.
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What does preapproval mean?
Preapproval offers are usually initiated by credit card companies and sent to you by mail or email.
Getting a preapproval offer, however, doesn’t necessarily mean you’ll be approved for that credit card, rather it means the card issuer reviewed your credit information and found you matched some of their requirements to qualify. For example, you have at least the minimum credit score, positive payment history and/or a low enough credit utilization ratio.
A preapproval offer will include card details like the credit limit, rewards and interest rate, but your final offer can be different if your credit information changes before you apply or if you don’t meet other requirements to get the most attractive terms.
Is it better to be preapproved or pre-qualified?
It’s typically better to be pre-qualified for a credit card than to be preapproved, since pre-qualification is a strong indicator you qualify for the card. However, neither one is a guarantee of the terms you’ll be approved for or even a guarantee you’ll be approved at all.
Pros of preapproval and pre-qualification
- Get a quote on credit card terms with no commitment.
- Both can be done without impacting your credit scores.
- Useful for comparison shopping to find the best credit card.
Cons of preapproval and pre-qualification
- Not a guarantee of credit card approval.
- Final credit card terms may differ once approved.
How do I know if I pre-qualify for a credit card?
If a credit card issuer offers pre-qualification for their cards, you can follow the instructions to pre-qualify. The process usually goes like this:
- Answer a few questions about your income and debt.
- The creditor conducts a soft pull on your credit report.
- The creditor informs you whether or not you likely qualify for the card and the terms you might receive.
Will this affect my credit score?
Getting pre-qualified for a credit card does not impact your credit scores. That’s because creditors do not conduct a hard inquiry into your credit information during this process. Instead, they perform a soft inquiry, which has no effect on your scores at all. However, if you opt to formally apply for the card after you get pre-qualified, the issuer will then conduct a hard inquiry, which can temporarily knock your credit scores down by a few points.
How can I get a preapproved or pre-qualified credit card offer?
You can find out if you pre-qualify for a credit card by completing the pre-qualification steps either on the creditor’s website, over the phone or in person. Of course, you’ll need to meet some of the creditor’s requirements for card approval, which often include meeting minimum credit score specifications.
For preapproval, some creditors allow you to initiate the process yourself, but it’s more likely you have to wait and receive an offer. You might be selected to receive a preapproval offer if your credit profile is in good condition and meet one or more of the eligibility requirements for the card.
What is a “good” credit score? Here’s what you need to know
Frequently asked questions (FAQs)
Depending on the credit card, you may be able to get either pre-qualified or preapproved before you formally apply.
You should not automatically accept a preapproved credit card offer. Before applying for any credit card, take time to determine if the card is right for you by reviewing the card details. Also, keep in mind that you might not qualify for the terms listed in the offer as the issuer will review your credit profile when making a decision.
Preapproval and pre-qualification can both give you a sense of whether or not you’re eligible for a credit card, but preapproval is usually a stronger indication you’ll be approved.
You can build good credit by using just one credit card, but some people prefer to use multiple accounts for other purposes, like to earn credit card rewards. The right number of credit cards for you depends on both your personal preference and your ability to manage multiple accounts without overspending, missing payments or accumulating unpaid debt.
Just like being preapproved or pre-screened for a credit card, being pre-selected means your credit information has been reviewed by the credit card issuer and you meet some of the requirements to qualify.
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