What is credit card pre-approval and how does it work?
If you’ve been pre-approved for a credit card, it means the lender has checked some of your credit information and thinks you meet their basic requirements. This makes it more likely that you'll be accepted for the card, but it’s not guaranteed.
4 min read
In a nutshell
- Being pre-approved means you have a good chance of being accepted for a credit card, but it isn’t guaranteed. At this point, the lender has looked at your credit information and thinks you meet their basic requirements.
- Improve your chances of pre-approval by checking for errors in your credit report. Building up your credit score and managing your finances well will also help.
- Whether you’re accepted or not will depend on a hard search of your credit file when you apply. You can still be rejected, even if you’ve been pre-approved.
- Getting pre-approved for a credit card doesn’t mean you have to apply for one. Only apply for credit if it fits your financial needs.
How does pre-approval work?
Getting pre-approved for a credit card involves the following steps:
- Use an eligibility checker like ours to see if you qualify. This tool will run a soft search of your credit report, which won’t affect your credit score or leave a footprint for lenders to see. It only takes a couple of minutes to get an answer.
- The credit card provider gathers information from the credit reference agency. This information includes your credit scores, credit history, and other financial data.
- The collected data is compared against the provider’s pre-set criteria. This could include a minimum credit score, specific income levels, and verifiable employment. If you meet the criteria, you are considered pre-approved.
- If you qualify, the issuer generates a pre-approved offer and sends it to you.
- You receive the pre-approved offer and can decide whether to apply for the credit card. The offer indicates that you have a high chance of approval but doesn't guarantee it. A pre-approved offer will usually come with a guaranteed APR. This is the interest rate you will get if your application is successful. You may also be given a guaranteed credit limit, though this is less common.
How do I get pre-approved for a credit card?
There are many things you can do to boost your chances of being pre-approved for a credit card:
- Check that your credit score is in good shape. If it’s lower than you’d like, you can work on boosting your credit score before you apply for a new credit card.
- Double check your credit report for any errors. It’s important to remove any mistakes from your credit report before you apply for a new credit card.
- Maintain good credit habits. Pay your bills on time, keep credit utilisation below 30%, and avoid making too many applications for credit.
- Make sure you’ve opted in to receive pre-approved offers. These offers are based on soft credit searches and suggest that you meet the provider’s initial criteria. You can do this directly with most credit card companies.
- Use an online eligibility checker to find pre-approved offers. These tools perform soft credit checks, which don’t affect your credit score.
Does a pre-approved offer affect my credit score?
A pre-approved credit card offer itself does not affect your credit score. Lenders only need to do a soft search to see if you’re eligible for pre-approval. This does not show up on your credit report.
Plus, getting pre-approval may protect your credit score if it prevents you from making multiple applications at once to find a credit card you qualify for. With each credit card application you make, the lender will perform a hard search on your credit report. This can temporarily lower your credit score by a few points.
Can I still be rejected for a pre-approved credit card?
Yes, you can still be rejected for a pre-approved credit card. Pre-approval means you meet the initial criteria and have a good chance of being accepted. But it's not a guarantee of approval. Here are some reasons why you might still be rejected:
- Recent changes in your credit profile, such as new debt or recent credit inquiries, might affect your approval.
- High levels of debt, missed repayments, or other signs of financial difficulty on your credit report. These would be picked up during the hard search carried out upon application and could affect your chances.
- Your debt-to-income ratio is too high. If a high proportion of your monthly income already goes towards debt, it may indicate to lenders that you can’t afford to borrow more money.
Should I apply for a pre-approved credit card?
It can be tempting to apply for a credit card if you know you’re likely to be accepted. But getting pre-approved doesn’t mean you must go ahead. You should only consider making a full application for a pre-approved credit card if it suits your financial needs.
If you are already in the market for a new credit card, weigh up the different factors before you apply. These include interest rates, fees, and how both might affect your budget.
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Intelligent Lending Ltd (credit broker). Capital One is the exclusive lender.
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