What is Credit Card Prequalification and What Issuers Offer It?
Use prequalifications to your advantage when looking for a credit card.
For anyone in the market for a new credit card, finding one with good benefits and terms is just one part of the process. The other side of it is figuring out if you will qualify. Some credit issuers offer an on-the-spot prequalification process to determine if you’re a good candidate for a particular card.
A prequalification can be a helpful research tool for consumers since it doesn’t ding your credit score with a hard inquiry like a full application does. However, being prequalified isn’t a guarantee that you’ll get the card.
What Is Credit Card Prequalification?
A credit card prequalification is an offer that a credit issuer gives you based on preliminary information, such as your estimated credit score range.
Prequalifications can happen in one of two ways:
- Prequalified mail offers: Most people are probably familiar with mailed prequalified credit card offers. Issuers work with the credit bureaus to develop a mailing list of consumers in a specific credit score range, and then send out promotional offers.
- Online prequalification: You can use an issuer’s website to fill in a short prequalification application. The application may only ask for your personal contact information and social security number. After submitting the form, you receive a response in a few seconds that tells you if you prequalify, and in some cases, lists of specific card options.
If you feel like you’re getting too many prequalified offers by mail, you can ask that creditors stop sending them via OptOutPreScreen.com.
Prequalification vs. Preapproval
Prequalification and preapproval can mean slightly different things depending on the lender, said Bruce McClary, senior vice president of communications for the National Foundation for Credit Counseling (NFCC).
“For prequalification, a creditor may reach out to the credit bureau and ask for information regarding which individuals meet a range of credit scores, and they will make prequalified offers to them,” McClary said.
A more in-depth investigation leads to a preapproved offer.
“Creditors look at other types of criteria, like your payment history, to determine beyond the score if there’s any indicator that suggests if you would be a favorable account holder,” said McClary.
As such, a preapproval offer may be a stronger approval indicator than prequalification since the offer is based on more insights. In other words, if you get a preapproval, you’ll probably get some type of offer, said Rod Griffin, senior director of public education and advocacy for Experian
Will Prequalifying Hurt My Credit Score?
Regardless of their slight differences, both prequalification and preapproval use soft inquiries that don’t impact your credit score.
If you decide to move forward with a prequalified offer, you’ll fill out a lengthier application that asks more questions about your income, home expenses, and bank accounts. From there, the issuer pulls your full credit report, which is when a hard credit inquiry will happen.
Generally, hard inquiries won’t do too much damage or are typically not going to cause a credit denial.
“(Hard) inquiries have minimal impact on credit scores,” Griffin said, but added that too many inquiries in a short period could have a more significant impact.
Neither prequalification nor preapproval means you’re guaranteed to get a credit card, though. If it’s a mailed offer, a lot can happen to your credit between lender prequalification or preapproval to the actual application submission. For instance, you might’ve missed a payment on another account and your credit score dropped, or your reported income isn’t high enough.
“If any information in the full application reveals that you do not meet certain criteria, you can be rejected,” says McClary.
Benefits of Prequalifying for a Credit Card
Prequalifying for a credit card can suggest cards that are a good fit for your credit level.
“Prequalification gives you more confidence in proceeding with the next steps in applying for a line of credit because there are some indications that you meet the guidelines for opening an account,” McClary said.
When lending standards may be tighter, or when consumers might be particularly sensitive about their credit scores, prequalification can provide helpful insight to those seeking new card options.
Those with mid- to lower-range credit scores tend to benefit most from prequalification.
“Receiving a prequalified offer might be the opportunity that they’ve been looking for and haven’t been able to identify,” McClary said.
On the other hand, prequalification becomes less necessary for those with top-tier credit scores (say, above 800) and ample income, who can feel reasonably confident that they’ll get approved for almost any credit line. Don’t let prequalification deter you from shopping around for the best deal.
“You should still see if there are better offers in the marketplace,” McClary said. “You don’t have to go with the first creditor that indicates they will say yes.”
When you fill out a prequalification form, the best new cardholder bonuses or introductory APR periods may or may not be available based on the issuer’s assessment of your credit and financial profile.
Which Credit Card Issuers Offer Prequalification?
While some of the major issuers allow prospective cardholders to fill out a prequalification application online, not all do. Some creditors only offer prequalification of specific cards, while others mail prequalified offers, but don’t allow consumers to prequalify online. Here’s a look at how prequalification works by issuer:
|Card Issuer||Offers Prequalification?||How to Apply||Notes|
|American Express||Y||Get prequalified for personalized offers.||American Express states that prequalified offers may not have a Welcome Bonus Offer or an Introductory APR.|
|Bank of America||Y||Bank of America provides customized offers based on a quick prequalification application.|
|Capital One||Y||Fill out the online prequalification form, including your social security number.||Consumers can only prequalify for the QuicksilverOne, Platinum, or Secured Mastercard.|
|Chase||Y||Chase lets consumers see if they are prequalified for offers.|
|Citi||N||N/A||While Citi usually has a prequalification application, they’ve temporarily suspended this option.|
|Discover||Y||Discover has a preapproval form rather than a quick application to prequalify. It requires applicants to share income and housing information.|
|First Premier Bank||Y||Enter your mailed prequalification confirmation number on the First Premier website.||Mailed offers only; no online prequalification.|
|HSBC||Y||You can see if you’re prequalified for two HSBC cards by filling out a quick form.||
The prequalification application is for the HSBC Gold Mastercard® or the HSBC Cash Rewards Mastercard®.
|Navy Federal Credit Union||Y||If you’re a member of Navy Federal, you can submit a prequalification application.||You must be a member of Navy Federal to prequalify.|
|Pentagon Federal Credit Union||Y||Mailed prequalification codes can be entered online|
|PNC Bank||Y||Mailed prequalification codes can be entered online|
- Prequalification is a preliminary analysis of your credit and financial history.
- A preapproval is a better indicator of your likelihood of getting a credit card.
- Getting a preapproval or a prequalification will not hurt your credit score.
- Some banks don’t offer prequalifications or preapprovals.