If You’re Pre-Approved for a Credit Card, Do They Check Your Credit?
Does pre-approval for a credit card guarantee no further credit checks? Understand the full process from initial offer to final approval.
When you receive a credit card pre-approval offer, it indicates an initial assessment by the issuer that you may be a suitable candidate for their credit product. This process involves specific types of credit inquiries that are important to understand.
Understanding Pre-Approval and Pre-Qualification
Credit card companies often use “pre-qualification” and “pre-approval” to describe preliminary assessments of eligibility. Pre-qualification is an informal check, often initiated by the consumer, to gauge potential eligibility for credit products. This process provides an indication of offers a consumer might qualify for without impacting their credit score.
Pre-approval, on the other hand, is a more formal and targeted offer from a credit card issuer. It often occurs after the issuer has conducted a preliminary review of a consumer’s credit history. While a pre-approval suggests a higher likelihood of acceptance, it does not guarantee final approval. Both pre-qualification and pre-approval serve as strong indicators of potential approval, yet neither commits the issuer to extend credit until a complete application is processed.
The Two Types of Credit Inquiries
The credit application journey involves two distinct types of credit inquiries: soft inquiries and hard inquiries. A soft inquiry, also known as a “soft pull,” occurs when a person or company checks a credit report for informational purposes. This type of inquiry is commonly used for pre-approvals, pre-qualifications, or internal account reviews. Soft inquiries do not affect a credit score and are not visible to other lenders.
A hard inquiry, or “hard pull,” occurs when a consumer formally applies for new credit, such such as a credit card, mortgage, or other loan. This type of inquiry allows the lender to conduct a thorough review of the applicant’s creditworthiness. Each hard inquiry can cause a small, temporary dip in a credit score.
Applying After Pre-Approval
Upon receiving a pre-approval offer, a consumer still needs to complete a formal application to finalize the credit card process. This application requires providing comprehensive personal and financial details to the issuer. It is at this stage, when the full application is submitted, that the credit card issuer will conduct a hard credit inquiry.
This hard inquiry is performed to verify all submitted information, assess any recent changes to the credit profile, and make a definitive lending decision. Despite having received a pre-approval, final approval is not guaranteed. The issuer may deny the application if new negative information is discovered during the hard inquiry, or if the provided information does not align with the initial pre-approval assessment.